Mr. Rabbitte: I am
grateful for the opportunity to raise this important matter affecting
thousands of our young citizens in the House this evening.
In ministerial reply after
ministerial reply in this House, questioning Deputies have been fobbed
off by the standard insurance industry mantra that the putative level
of insurance costs for young drivers is a function of the claims record,
especially of young male drivers, and, effectively, there is nothing
within EU rules that the Minister can do about it. The record shows
that no month has passed without this issue being pressed at the relevant
Question Time and the Minister doing his ritual handwashing exercise.
To make matters worse, the most prominent figures in the industry have
attended in sequence before the Committee on Enterprise and Small Business
and defended the inordinate costs levied on young drivers by reference
to their claims ratio which they said made any reduction not viable.
If The Irish Times
report of the Motor Insurance Advisory Board findings is correct, the
position of the industry has been at a minimum misleading and the position
of the Minister of State naive and foolish. He must now tell the House
why he continued to regurgitate the traditional excuse for inaction,
even after he received the Motor Insurance Advisory Board preliminary
report last July. The industry must explain why, although it had full
knowledge of the MIAB report, its leading figures appeared before an
Oireachtas Select Committee over recent months and stuck to their original
position. Meanwhile tens of thousands of young people, who in most cases
need a car to get to work, are expected to bear burdensome and crushing
insurance costs because the testimony of the industry that it is an
unprofitable enterprise is relied upon by the Minister.
It is all too tragically true
that the rate of accidents among young male drivers in particular is
alarmingly high. However, both the Minister of State and the industry
must now explain why the MIAB has apparently concluded that young drivers
are virtually the most profitable segment of the market. They must explain
if it is true that young female drivers contributed on average £730
per annum per person to profitability. If those figures are accurate,
the position of the industry is a disgraceful misrepresentation of the
true position. The recklessness and appalling record of some young male
drivers ought not be allowed distort the fact that tens of thousands
of responsible young drivers are being punished on the fraudulent basis
that they constitute an inherent loss-making segment of the market.
This is a very significant
issue of public interest. Some young people are expected to pay more
for annual insurance cover than they paid for the motor vehicle being
insured. If the MIAB report is borne out, they are victims of grave
misrepresentation by the industry in which the Minister of State, knowingly
or otherwise, is complicit. This revelation is reminiscent of the discovery
a few years ago that in their annual presentation of the Blue Book the
industry conveniently excluded reference to investment income. It is
now time for a detailed examination of practices in the industry and
for immediate alleviation of the burdens unfairly imposed on young drivers.
It is especially regrettable
that, in his remarks on the Order of Business today, the Taoiseach lapsed
into the old waffle that the figures are in dispute and came out essentially
on the side of the industry. Nor did he make any attempt to explain
why his Minister sat on the draft report since last July, while the
members of the Oireachtas committee were made fools of by the industry.
He might have explained why the Personal Injuries Tribunal report initiative,
which he today confused with the MIAB report, has taken almost four
years to win the approval of his reluctant Minister who, it must be
said, has never shown that the consumers, young or old, are his first
priority.
Minister of State at the
Department of Enterprise, Trade and Employment (Mr. Treacy): I set
up the Motor Insurance Advisory Board in 1998 to examine the factors
that influence the cost of motor insurance and, in particular, the relationship
between the premiums charged to different categories of drivers and
the claims experience of those categories. The board is chaired by Ms
Dorothea Dowling, Claims Manager of Coras Iompair Éireann and a Fellow
of the Chartered Insurance Institute, with 15 years experience in this
industry in both Dublin and London . The board members are representative
of all the various groups interested in motor insurance, including representatives
of consumers, commercial motorists, young drivers, the Garda, Departments
of Justice, Equality and Law Reform, Environment and Local Government
and Enterprise, Trade and Employment, driver trainers, the motor industry
and, of course, the insurance industry, including brokers.
The Motor Insurance Advisory
Board submitted its interim report to my Department last June. The board
was conscious that the date on which it had based its interim report
was incomplete and that the findings were, therefore, tentative. Thus,
the interim report clearly stated that the board required access to
the individual raw data before any firm conclusions could be reached.
I want to categorically contradict what Deputy Rabbitte has tried to
portray here this evening, that is, that the MIAB has apparently concluded
its business. The MIAB has not concluded its business. Furthermore,
it became clear last October that there were serious deficiencies in
the raw data. The board took the view that the flawed information compromised
the already tentative conclusions of its report and brought this fact
to my immediate attention.
In essence, the data concerning
claims experience in various categories of drivers did not cover the
whole market. The MIAB considered that the missing data was very significant
and could have a serious impact on its analysis. In addition, it was
not clear that the data adequately identified different categories of
driver. In particular, it was not clear that women drivers were always
separately identified. The challenges in producing accurate data largely
arose because the centralised IT system the insurance industry used
to deliver the necessary data had difficulties in coping with mergers
in the insurance industry which had necessitated integration of sometimes
very different computer systems. It appears that these difficulties
have been resolved and that the insurance industry is now in a position
to deliver accurate data to the MIAB.
Once the board was in a position
to confirm that the insurance industry would be supplying up-to-date
accurate data to facilitate the board's analysis of that data and the
completion of its task, I extended the appointment of the Motor Insurance
Advisory Board until the end of 2001. It is vital that any consideration
by this Government of issues arising from the levels of motor insurance
premiums should be on an accurate and well informed basis. I respectfully
suggest that Members of this House, rather than playing politics with
this serious issue, reflect on facts rather than fiction.
Mr. Rabbitte: I am
not playing politics. It is nine months since ----
Mr. Treacy: I will
take no lectures from Deputy Rabbitte. He spent three years in the Department,
sat on his hands and did not even consider the fact that there was not
a Motor Insurance Advisory Board in operation for five years, which
I had to revamp. He should not lecture me on this issue because he did
nothing about it.
Mr. Rabbitte: The Minister
of State must be joking.
(Interruptions).
An Leas-Cheann Comhairle:
The Minister of State must address his remarks through the Chair. I
ask Deputy Rabbitte to resume his seat.
Mr. Treacy: I will
take no lectures from Deputy Rabbitte who failed as a Minister. He is
a waffler and an exploder of energy and whim -----
(Interruptions).
Mr. Rabbitte: The Minister
of State is a hack of the industry.
An Leas-Cheann Comhairle:
I ask Deputy Rabbitte to resume his seat and allow the Minister
of State to continue.
Mr. Rabbitte: I will
as soon as I tell the Minister of State he is a partisan hack.
An Leas-Cheann Comhairle:
The Deputy is totally out of order.
Mr. Treacy: What an
ignorant thing to say.
An Leas-Cheann Comhairle:
The Minister should continue and address his remarks through the Chair.
Mr. Higgins (Dublin
West): They made fools of us.
Mr. Treacy: The Government,
the Tánaiste, the Department of Enterprise, Trade and Employment and
myself are very appreciative of the hard work already done by the board.
We look forward to the work currently being undertaken and to the board's
final report. It will make a very valuable contribution to informed
debate on motor insurance costs. It is expected that the board will
report towards the end of this year. The Government will take full account
of the board's final recommendations and will refer them, as appropriate,
to the Financial Services Regulatory Authority.
The Government is pursuing
a number of other initiatives to address issues related to the level
of insurance premiums. We decided last week to prepare for the establishment
of a personal injuries assessment board to reduce the high cost of delivering
personal in jury compensation.
Mr. Rabbitte: It took
the Minister of State four years.
Mr. Treacy: It did
not take me four years.
An Leas-Cheann Comhairle:
I ask Deputy Rabbitte to resume his seat.
Mr. Treacy: Deputy
Rabbitte, you have made outrageous allegations. They are unsubstantiated,
non-factual and ridiculous fiction.
An Leas-Cheann Comhairle:
I ask the Minister to address his remarks through the Chair.
Mr. Rabbitte: Four
years.
Mr. Treacy: In December
1996, six months before you left office, you established this board,
which has reported to me twice. I acted on the report against the wishes
of other people. You participated in a Government, some of whose---
An Leas-Cheann Comhairle:
I ask the Minister to address his remarks through the Chair.
Mr. Rabbitte: The
report was ready in May 1997. This is 2001.
An Leas-Cheann Comhairle:
If Deputy Rabbitte does not resume his seat I will adjourn the House.
If I suspend the sitting his colleagues will not have an opportunity
to raise their matters.
Mr. Rabbitte: I do
not want you to do that, a Leas-Cheann Comhairle.
An Leas-Cheann Comhairle:
The Deputy is leaving me with no option. I ask the Minister to address
his remarks through the Chair.
Mr. Rabbitte: Four
years.
Mr. Treacy: The Deputy
established the board in December 1996. It has reported to me twice
and I have acted on the report.
(Interruptions.)
An Leas-Cheann Comhairle:
Please, Deputy Rabbitte. One word more and I will suspend the sitting.
Mr. Treacy: We decided
last week to prepare for the establishment of a personal injuries assessment
board to reduce the high cost of delivering personal injury compensation.
Research undertaken by the MIAB indicates that a high proportion of
outlay on injury claims is absorbed by fees paid to lawyers and other
professional experts. It should be noted that for every £100 compensation
paid for injury in motor accidents an extra 40% goes on professional
fees.
A number of initiatives have
been taken by the Minister for the Environment and Local Government
to reduce accident frequency. While there is still some way to go and
accident rates remain too high, particularly in view of their human
cost, we are achieving real progress, particularly when the rates of
accidents are compared with the significant rate of growth in car ownership.
Car numbers have risen from 828,000 in 1996 to approximately 1.3 million
today. I trust these facts put the matter in context.
