Central Bank deputy governor Ed Sibley has backed calls for new guidelines for judges on personal injury awards in order to reduce variations in court rulings and lower premiums for customers.
Mr Justice Nicholas Kearns, former president of the High Court, made the recommendation last year in a report of the Personal Injuries Commission, which found that the average compensation award for whiplash in Ireland is almost 4½ times higher than in Britain.
“Such guidelines should lead to greater levels of consistency in the assessment of general damages in Ireland, which should help in better enabling the domestic non-life insurance sector to support its customers,” Mr Sibley said at a Central Bank insurance conference in Dublin on Friday.
The comments come a day after it emerged that Minister for Justice Charlie Flanagan had asked judges to set up a committee with representatives of the Personal Injuries Assessment Board (PIAB) and Department of Justice staff to review guidelines for minor personal injury claims, including whiplashes and soft-tissue injuries.
The setting up of a committee is considered a stopgap measure to try and reduce insurance costs ahead of the setting up of a judicial council, which would require enabling legislation to be passed.
Meanwhile, Mr Sibley said that Irish-based insurers need to work more on plans for their recovery or wind-down should they run into trouble. European banks have had to draw up such plans – or what are known in the banking world as “living wills” – to satisfy regulators in the wake of the financial crisis.
"The regulatory regime for insurance is not sufficiently robust or consistent across Europe, " said Mr Sibley.
“This issue is accentuated by the inconsistency in insurance compensation schemes across Europe – an issue for both home and host supervisors. As well as pushing for further developments at a European level, the Central Bank is driving firms to improve how they execute recovery planning as well as advancing our own approach to resolving insurance firms.”