The road to insurance reform

In December 2020, while the country was deep in a level 5 lockdown, the Government published the long awaited Action Plan for Insurance Reform. The stated aims of this action plan are:

  • Make relevant legislative amendments to the Judicial Council Act 2019 to have the Personal Injuries Guidelines adopted by 31 July 2021
  • The Judicial Council to adopt and publish Personal Injuries Guidelines to replace the Book of Quantum
  • Commence Sections 98 and 99 of the Judicial Council Act 2019. These will provide that (a) the Personal Injuries Assessment Board (PIAB) will no longer be responsible for preparing a Book of Quantum and (b) the court shall, in assessing damages in a personal injuries action, have regard to the Personal Injuries Guidelines and where it departs from those Guidelines, state the reasons for such departure in giving its decision
  • Report on the implementation and early impact of the Personal Injury Guidelines and examine relevant policy response
  • Enhance and reform the role of the Personal Injuries Assessment Board including through legislative proposals
  • Examine changes to the Occupiers’ Liability Act 1995 to strengthen waivers and notices to increase protections for consumers and businesses. Taking account of the Programme for Government commitment, make proposals to Government to implement any changes deemed necessary
  • Provide recommendations regarding changes to be made to reduce insurance fraud. This will include examination of penalties for insurance fraud
  • Implement recommendations including through the introduction of legislation if required
  • Enact and commence the Perjury and Related Offences Bill 2018.

These are extremely important issues in reforming the insurance sphere, particularly for small businesses. The small business community has long been at the coalface of the inequality that exists within the insurance market. With the spirally costs of insurance and eye watering awards that are being handed down by the Courts, the actions in this plan are long overdue.
One of the most important aspects of the Action Plan is the need for periodic progress reviews by the implementation group to Cabinet. We in the SFA believe that this is vital as it allows stakeholders and Government to see how the action plan is progressing. The most recent progress report was on the 1st of March 2022. The implementation group reported to Cabinet that approximately 80% of actions in the Plan are now being delivered, with the remaining initiated.

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It is also crucially reported that the principal actions delivered to date were:

  • The Personal Injuries Guidelines have been given effect
  • Legislation to strengthen the laws on perjury has been enacted
  • The Office to promote competition in the insurance market has been established
  • The Insurance Fraud Coordination Office has been established.

One of the most important aspects of the Action Plan is to tackle the inflated levels of awards being handed down by the Courts and the reform of the Book of Quantum, which PIAB uses to set the level of compensation that is awarded.
The General Scheme of a Bill to enhance and reform PIAB was published on 9 February 2022 by the Minister for Trade Promotion, Digital & Company Regulation. The policy objective of the General Scheme is to facilitate an increase in the number of personal injury claims that may be resolved through the Board’s process and without recourse to litigation. Encouraging more claimants and respondents to avail of the Board’s model through mediation and/or assessment should lead to cost savings in the claims environment and contribute to reductions in insurance premiums. Amendments to the discretionary powers provided to the Board as set out in section 17 of the Personal Injuries Assessment Board Act 2003-2019 and amendments to section 51A of the Act are intended to increase the number of personal injury claims which can be resolved through the Board.
As the General Scheme proposes to place an increased emphasis on the resolution of claims through an amended personal injuries framework which facilitates mediation and assessment as means of resolving personal injury claims, it is proposed to rename the Board as the Personal Injuries Resolution Board. The General Scheme also contains several amendments to the Act to enhance the advocacy and outreach of the Board, to provide for additional data analysis and reporting and to facilitate the prevention of fraud.
The issue of fraud pushing up the prices of premiums is one which the SFA has been highlighting for a number of years and it is important to see that in the implementation report of March 2022, the Government recognises this by giving The Garda National Economic Crime Bureau (GNECB) increased resourcing in 2021 (from 95 personnel at the end of 2020 to a total of 127 at the end of 2021) and an Insurance Fraud Coordination Office was opened in July 2021. The establishment of this office will improve cooperation and coordination with the insurance Industry, bring consistency to the handling and investigation of insurance fraud referrals and should facilitate more cases being referred to the DPP for prosecution. To facilitate a greater understanding of insurance fraud within the service, the GNECB has been proactively sharing guidelines on investigating insurance fraud with all divisions across An Garda Síochána. Furthermore, it is also providing training and support to all Garda Divisions in how to investigate fraud.
Insurance is just one facet of the ever-increasing cost of doing business for many small firms, but it is one which has been on the Government’s radar for a number of years. The small business community is glad that at long last, tangible measures are now being taken to reform this industry. We will watch with interest how this process plays out and will ensure that it is fair and equitable for all small businesses.

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