Reform of insurance sector targeted by senior Ministers

Cabinet seeks to apply muscle to address insurance costs and compensation payouts

Senior Ministers have been drafted in to strengthen the Government’s approach to insurance reform after the previous administration’s efforts to bring down costs to consumers fell short.

The Irish Times has learned that a high-level meeting took place this week involving five senior Ministers, as the Government seeks to bring extra political and departmental muscle to bear on the long-standing issue of high insurance costs and compensation payouts.

Talks this week on how to reform the sector were attended by Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar; Minister for Justice Helen McEntee; Minister for Finance Paschal Donohoe; Minister for Public Expenditure and Reform Michael McGrath; and Minister for Children Roderic O'Gorman, who spoke to the meeting about the costs of insurance to the childcare sector.

The insurance sector has traditionally been the responsibility of a junior minister in the Department of Finance, but sources said several Cabinet Ministers would play a "hands on" role in an effort to deliver on promises made in the programme for government.


‘Competitive issues’

The reform agenda will still be led, however, by a junior minister in the Department of Finance.

This week's meeting was chaired by Jack Chambers, who was since reappointed as government chief whip in the wake of Barry Cowen's dismissal from Cabinet.

Incoming Minister of State Sean Fleming will continue to lead the project, it is understood.

The programme for government promises to “prioritise reform of the insurance sector” and to address high claim payouts and “competitive issues” to build an insurance system “which is affordable and reliable and underpins a vibrant economy”.

Sources said that previous efforts to reform the sector had partially fallen flat due to a lack of political capital invested by Cabinet ministers in the reform programme.

The previous government, with then minister of state Michael D'Arcy in charge of the brief, convened a costs of insurance working group (CIWG), which was composed of officials from the Department of Finance, Central Bank, Department of Business and the Department of Justice, as well as the State Claims Agency and the Personal Injuries Assessment Board.

Consumer-facing segments

However, reform efforts often struggled to get purchase due to the lack of ministerial involvement in line with ministries directly associated with different aspects of the issue, figures involved in the last administration said.

Government sources believe that delivering early on the issue in the new government’s term, especially in consumer-facing segments like motor insurance, would resonate with voters.

While it is understood that this week’s meeting did not address specific policy proposals, the programme for government outlines a range of potential interventions, with an emphasis on motor, public liability and employer liability insurance.

These include an enhanced and reformed role for the Personal Injuries Assessment Board, the regulation of claims management companies and claims harvesters.

It will also consider the need for a constitutional amendment, and an associated referendum, which would enable the Oireachtas to set down guidelines on award levels.

It also promises to expand the Garda Economic Crime Bureau and increase the penalties for fraudulent claims, and place perjury on a statutory footing, making the offence easier to prosecute.

A spokesman for the Department of Finance said the Government’s intended work on insurance “builds and expands upon previous work done by the Cost of Insurance Working Group”.

“The purpose of this week’s Ministerial meeting was to discuss how to take forward the implementation of this cross departmental insurance reform agenda.”

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a Political Correspondent with The Irish Times