Fuelled by cycle of rising and falling insurance premiums, the high level of personal injury awards, and a series of high profile successes against fraudulent claimants, in recent times it seems that the topic of insurance has never been far from the front pages of the news.
The newly published draft Programme for Government contains a section dedicated entirely to Insurance Reform, which sets out a range of actions that the proposed new Government plans to take around the issue of insurance reform.
Chief among them is the decision to confer responsibility for the delivery of insurance reform on the Cabinet Committee on Economic Recovery and Investment. This means that insurance reform won’t rest on the shoulders of just one Minister
Commitments aimed at addressing the cost of insurance and tackling insurance fraud feature strongly, and unsurprisingly, there is a focus on the role that the insurance industry can play in the context of the fall-out from Covid-19.
The draft Programme contains a pledge to prioritise the establishment of a fully functioning European-wide single insurance market, but is silent as to what concrete actions the Government will take to deliver upon this long overdue objective.
It is clear that the new Government is planning ambitious level of legislative reforms for the insurance sector.
The draft Programme signals a series of reforms that are likely to require the introduction of new legislation in a number of areas, including:
- regulating claims management companies and claims harvesters;
- changes to the Occupiers Liability Act and the Civil Liability Act (duty of care) to strengthen waivers and notices to increase protections for consumers, businesses, sporting clubs and community groups;
- strengthening the Solicitors (Advertising) Regulations 2002;
- increasing the penalties for fraudulent claims;
- placing perjury on a statutory footing (a task that was almost completed by the previous Dáil and Seanad);
- additional enforcement powers to enable the CCPC to punish and deter anti-competitive conduct; and
- enhancing and reforming the role of the Personal Injuries Assessment Board.
The draft Programme also indicates that the Government will consider the need for a constitutional amendment to enable the Oireachtas to set down guidelines on award levels.
In addition to the legislative measures outlined above, the draft Programme pledges that the Government will get tough on insurance fraud by seeking to increase cooperation between the Gardaí and the insurance industry. In addition, the Garda Economic Crime Bureau which deals with fraud will be expanded with the intention that Gardaí in every division will have expertise in tackling fraud.
The draft Programme contains a commitment to ensure that fraudulent claims are forwarded to the DPP. There is also a commitment to explore the feasibility of obliging fraudulent claimants to pay the legal expenses of the successful defendants. Notable is the pledge to publish insurance fraud data.
In addition to providing for additional enforcement powers for the CCPC, the draft Programme pledges to create an office within Government tasked with encouraging greater competition in the Irish insurance market. The draft Programme also indicates that the new Government will work to remove dual pricing from the market.
Gathering of Data
The draft Programme commits to expanding, with urgency, the National Claims Information Database to employer liability and public liability to track the level of claims. There is also a commitment to establish a databank within the Central Bank for new entrants to the insurance market.
Impacts of Covid-19
The draft Programme pledges that the Government will work to protect customers during and after the COVID-19 crisis with particular emphasis on business disruption insurance, travel insurance and rebates for motor insurance customers. The draft Programme also makes clear the new Government’s support for the Central Bank’s direction on compensating businesses with disruption cover for infectious diseases.
Timeframe for New Government
While the publication of the draft Programme for Government confirms the agreement of the three party leaders and their respective negotiating teams, the draft Programme will be presented to members of each of the three parties for their approval. If the draft Programme is ratified by party members, the new Taoiseach is expected to be elected before the end of June. Only then will the task of implementing the Programme for Government get underway.
Click here to access the draft Programme for Government.