Minister D’Arcy publishes the Cost of Insurance Working Group’s Report on the Cost of Employer and Public Liability Insurance

Minister of State for Financial Services and Insurance, Michael D’Arcy TD has today (Thursday) published the Cost of Insurance Working Group’s (CIWG’s) Report on the Cost of Employer and Public Liability Insurance. Minister D’Arcy presented the report to Government on 23rd January 2018, and the Government has approved the report. 

Following the publication of the CIWG’s Motor Insurance Report in early 2017, the Working Group considered the issue of employer and public liability in the context of the cost of business insurance. The report, prepared by the Cost of Insurance Working Group under the Chairmanship of Minister of State D’Arcy, was provided to Minister for Finance and Public Expenditure & Reform Paschal Donohoe TD, who endorsed it earlier this month.

The CIWG’s Report makes 15 recommendations with 29 associated actions to be carried out. The recommendations and actions are detailed in an action plan contained in the report with agreed timelines for implementation.  The recommendations, covering three main themes, include actions to:

  1. Increase Transparency: enhance levels of transparency and improve data sharing and collection processes
  2. Review the level of damages in personal injury cases: request that the Law Reform Commission undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries and
  3. Improve the personal injuries litigation framework: through a number of measures, namely:
    • ensuring potential defendants are notified in sufficient time that an incident has occurred in relation to which a claim is going to be made against their policy;
    • tackling fraudulent or exaggerated claims; and
    • ensuring suitable training and information supports are available to the judiciary to assist in the fair and consistent assessment and awarding of damages in personal injury cases.

Minister of State D’Arcy highlighted that:

“The recommendations in this Report are credible and therefore achievable.  However, it will require a level of open-mindedness and co-operation from all sides involved in the personal injury claims area.  I am hopeful that the recommendations will be taken in the spirit that they are made.  There is no intention to undermine the current awards system and, in particular, the rights of the plaintiff.  Nonetheless, I believe that there is a need for serious reflection on how the personal injuries litigation system as a whole is operating and the impact it is having on the cost of insurance, and what this means for society in general. 

 The implementation of the recommendations in this Report, along with those in the Motor Report, will lead to greater stability in the pricing of employer liability and public liability insurance and will help prevent the volatility which we are currently seeing in the market.

The Working Group, chaired by Minister of State D’Arcy, will continue to meet in 2018 and will focus on the ongoing implementation of the 2017 Motor Report and this new Report focusing on Employer and Public Liability insurance.

ENDS

25th January 2018

 

CONTACT:

Aidan Murphy – Press Officer, Department of Finance – +353(0)85 886 6667 – pressoffice@finance.gov.ie

 

Background Note to Editors:

The Cost of Insurance Working Group, chaired by Minister of State for Financial Services and Insurance, Michael D’Arcy TD, is comprised of representatives from the Department of Finance, the Department of Business, Enterprise and Innovation, the Department of Justice and Equality, the Central Bank of Ireland, the State Claims Agency, and the Personal Injuries Assessment Board.

Following the publication of the Report on the Cost of Motor Insurance (Motor Report) in January 2017 the Working Group commenced its examination of the cost of business insurance, in particular employer liability and public liability insurance.  Although the CSO does not produce specific data on the price variance of employer and public liability insurance, its CPI statistics on the cost of insurance overall showed an increase of 57% from January 2011 to July 2016. 

While it is acknowledged that there are significant differences between these forms of insurance and motor insurance, the Working Group is strongly of the view that many of the recommendations in the Motor Report around areas such as improving the personal injuries environment and reducing insurance fraud are as relevant to employer liability and public liability insurance.  Therefore, the aim of the Working Group was to try to develop an understanding of the difficulties faced by businesses, as well as why these problems are arising and from there to come up with a set of recommendations tailored to the need of the business sector, but which build upon the relevant recommendations in the Motor Report.

In doing this, the Group has remained conscious of two key points: (i) the need to ensure that an economically vibrant and financially stable insurance sector is maintained, and (ii) that there is no diminution of the rights of plaintiffs.   In line with the earlier work, the aim of the Group’s report is for all relevant bodies and stakeholders to work together in order to help deliver fairer premiums for businesses without unnecessary delay. 

The Working Group met fifteen times during 2017 and undertook an extensive consultation process involving a range of stakeholders.  The Working Group operated by way of two sub-groups, broadly looking at market related issues and legal issues.  Chairs were appointed to these sub-groups and work commenced at sub-group level in July 2017.  The sub-groups met on a weekly basis thereafter.  The output of the sub-groups fed into the meetings of the Working Group, with the Working Group acting as a Steering Group to the sub-groups.

The Working Group has now finalised and agreed the Report on the Cost of Employer and Public Liability Insurance.  The Report makes 15 recommendations across three areas, with 29 associated actions to be carried out in agreed timeframes set out in an action plan in the report.