Insurers accused of ‘over-egging’ fraudulent claims

Minister for Justice Charlie Flanagan has accused the insurance industry of "over-egging" the issue of fraudulent claims and not being upfront on setting insurance premiums for motorists and businesses.

The Minister said he had delivered a Bill, passed last week by the Seanad and waiting to be signed by President Michael D Higgins, that would pave the way for an overhaul of personal injuries payouts.

In the interim, it was up to insurers to “act hastily” to help reduce premiums for their customers, he said. The insurance industry had been “quick to blame the courts” and, while the judicial council was being established to consider awards, he wanted to see “good faith” from insurers in addressing high premiums.

“There is a lack of transparency. They are not upfront. Premiums and insurance costs for small businesses are being increased with a lack of reasoning on the part of the insurance companies,” he told The Irish Times.

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“They are not justifying what has been a quadrupling of premiums which are resulting in the crippling of small businesses and having an adverse impact on community groups and voluntary endeavours.”

Threat to business

The Government is pushing through the new legislation in a move, led by the Minister of State with responsibility for Insurance Michael D’Arcy, to target the rising cost of insurance that is threatening businesses.

After the Bill was signed, the judicial council would be set up by the end of the year, said Mr Flanagan, and it would establish mandatory guidelines for judges in setting awards in personal injuries cases.

Mr Flanagan said he accepted there was an element of fraud and exaggerated personal injury claims but that insurers have been “unable to stand up their claims that one claim in five is fraudulent”.

“That is simply not the case,” he added.

The Minister said he was satisfied the judicial council would introduce “a measure of consistency” that had been lacking in terms of the size of awards and that new guidelines would support judges in future.

‘Fraud is crime’

He had spoken to Garda Commissioner Drew Harris about the issue of fraudulent claims. "Fraud is crime. Any criminal offences will be investigated and I am satisfied that the gardaí are now doing that and they are doing that at regional level," he said.

“I am calling on the insurance industry to provide the Garda with the evidence and when the Garda have the evidence, I am satisfied that they will act accordingly.”

Mr Flanagan said he could not push the judiciary to act quickly to nominate judges to the council but that he expected it to be done by the end of the year.

“It’s urgent as well as being important,” he said.

He was speaking after the National Day of Commemoration at Collins Barracks in Dublin.