People are being forced to pay “huge” insurance premiums because individuals are exaggerating personal injury claims, and legislation introduced to reform the sector is not working, the new Minister with responsibility for the area has said.
Fine Gael's Michael D'Arcy replaced party colleague Eoghan Murphy as Minister of State with special responsibility for Financial Services and Insurance in Taoiseach Leo Varadkar's ministerial reshuffle on Tuesday.
Outlining his priorities in his new role at the Department of Finance headquarters on Merrion Street on Thursday, Mr D’Arcy said an area of “major concern” was public liability.
“In terms of insurance, it’s a major cost to every individual and business in the State,” he said. “We need to reduce the cost of insurance, because it’s a hell of a cost.
“One of the areas of major concern is public liability. People are making claims for soft tissue injuries and getting tens of thousands of euro. It’s the type of thing that is really creating issues. The concern is that the amounts being paid out are too much.”
Furthermore, Mr D'Arcy was critical of the effectiveness of the Personal Injuries Assessment Board Act, which established a body to streamline claims applications, avoid unnecessary litigation and reduce costs.
“The personal injuries assessment board legislation was to ensure there would be an easier and faster process to go through, rather than going through the courts,” he said. “I’m not so sure it’s happened well enough. There is still a concern for businesses that public liability payouts are too high.
“Are people exaggerating claims? Are people being fraudulent? There seems to be some evidence that that is happening. We will be focusing on that sector to try and help businesses.
Injuries board
“People are paying huge premiums and some of that is because of these payouts. I would like to see more claims going through the injuries board, but people are of the impression that they will get a higher reward through the courts.”
Mr D’Arcy also said the Government was “on target” to achieve the implementation of 45 out of 71 recommendations in a report on motor insurance by the Oireachtas Finance Committee.
On Brexit, Mr D'Arcy said he would not know how many financial institutions have made inquiries about relocating to the Republic until after he meets Central Bank governor Philip Lane and IDA Ireland chief executive Martin Shanahan.
“There was an expectation that companies would hold off until after the UK general election was conclusively decided,” he said. “That uncertainty has even increased a bit because of the Tories’ failure to achieve an overall majority.
“It’s probably delayed companies making their final decisions. A lot of companies have had initial conversations but they haven’t concluded their decisions.
“The expectation is that sometime around mid- to late September or early October, companies will determine whether they will exit the UK, provide sub offices here, or establish corporate entities here directly themselves.”
The “particular challenge”, he said, was in relation to how the regulatory regime would interact with potential suitors. “The days of light-touch regulation are over, but there has to be a balance achieved,” he said.
Mr D’Arcy added that he hoped to increase the proportion of financial services jobs located outside Co Dublin from the current level of 30 per cent.
