More powers for IRB among action plan on insurance costs
Improving pricing transparency and giving the Injuries Resolution Board (IRB) more powers are among the main measures outlined by the Government to bring down insurance costs in the latest action plan on insurance reform.
The plan, launched today, runs until 2029 and contains a total of 26 actions to bring down insurance costs, ten of which are described as ‘priority actions’.
They include a focus on transparency in the insurance sector, particularly in terms of pricing.
As part of this, the Department of Finance will work with insurers to introduce a transparency code.
Other priority actions include strengthening the powers of the IRB, a feasibility study on a cap for certain categories of personal injuries awards, exploring tougher penalties on insurance fraud and measures to reduce the number of uninsured drivers.
The Government says it aims to tackle the reliance on litigation, particularly for motor insurance claims and that this will be an important element of the proposed IRB reforms.
According to recent figures from the Central Bank’s National Claims Information Database (NCID) on settled private motor claims, it is 22 times more expensive for a claimant to take a claim through litigation rather than through the board.
Meanwhile, the NCID found the timeframe for settled claims through litigation is significantly longer than those settled through the IRB, with the level of awards not being materially higher.
Enhancing the Office to Promote Competition in the Insurance Market as well as streamlining the authorisation process for new market entrants will also be a key focus of the plan.
These priority actions are viewed as the ones that will have the biggest impact on insurance affordability, transparency and availability.
According to official figures, comprehensive cover now accounts for over 90% of motor policies, and with a rise in repair costs more consumers are now less inclined to protect their no claims bonus and more likely to claim on their insurance, which impacts overall premiums.
As part of the development of the action plan, the Department of Finance held a public consultation process that received over 70 submissions from private businesses, political parties, representative bodies and members of the public.
The last action plan on insurance was published in 2020 and led to initiatives such as rebalancing of the duty of care and the personal injuries guidelines, which have helped to bring down the value of claims.
The action plan was launched by Minister of State for Insurance Robert Troy, and Minister for Enterprise Peter Burke.
Minister Troy said that “despite progress on insurance costs in recent years as a result of the Government’s previous action plan on insurance reform, an inflationary global climate has led to some costs creeping up again”.
He added that “it is vital that consumers are seeing greater transparency from the insurance sector, particularly in regard to how their premium is communicated to them”.
The implementation of the action plan will be led by Minister Troy through the Department of Finance and monitored by the Cabinet Sub-Group on Insurance Reform, which is chaired by Tánaiste Simon Harris.
Mr Harris said the Government’s latest plan “builds on the strong insurance reforms to-date which have led to improvements in transparency and have seen personal injury awards reduce”.
“By Government working together, we can deliver tangible progress in this next phase of insurance reform so that the benefits are felt by both businesses and consumers,” he added.
Prior to publication of the action plan, the Cabinet Sub-Group on Insurance Reform agreed to not seek approval from the Dáil and Seanad on an increase in personal injuries awards, as recommended by the Judicial Council.
This was a move welcomed by both insurers and consumer groups, who had warned it would have driven up premium costs.
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