Government set to impose a ‘code' on insurers in bid to track impact of reforms
The Government aims to 'enhance transparency in insurance premiums' by working with the insurance industry, according to the latest Action Plan for Insurance Reform, which is due to be launched today.
A feasibility study is to be carried out to see how data on insurance costs and premiums collected by the Central Bank can be used to shine a light on whether or not insurers are passing on the benefits they are getting from insurance reforms.
The industry has benefited from a strengthening of the Injuries Resolution Board, changes to duty of care legislation, lower judicial guidelines on award payouts and the creating of a garda anti-fraud unit.
In the past few weeks the Cabinet Sub-Committee on Insurance Reform, chaired by Tánaiste Simon Harris, decided to turn down a proposal from the Judicial Council to hike the judicial award guidelines by 17pc, in what was a huge boost to the insurance industry.
In litigated cases, the legal fees average €24,786
The Action Plan will cover a period to 2029 and will set out a schedule of actions, for the departments involved and for other bodies such as the Central Bank.
The Action Plan will focus on six key themes: transparency and affordability, competitiveness and availability, fraud, innovation and skills and climate protection and legal reform.
Minister of State at the Department of Finance with special responsibility for insurance Robert Troy is spearheading the insurance reform agenda.
Actions in the new plan include reviewing the powers of the Injuries Resolution Board to make it the default route for determining injury awards, and awarding legal fees for cases determined by the board rather than in the more costly courts.
Benchmarking Irish awards against the payouts in the UK and the rest of Europe for similar injuries is among the tasks in the new action plan.
Getting to grips with legal costs is also under consideration in the action plan. This will include examining the possibility of developing clear guidelines and scales of fees that lawyers charge for civil litigation, including in personal injuries cases.
The Central Bank has found that legal fees for cases settled through the Injuries Resolution Board average €597 – however litigated cases have average legal costs of €24,786.
Reviewing how insurance firms have implemented a ban on so-called 'price walking' – a practice that punished customers who stick with a provider – is also being considered, as is a move to provide greater transparency for customers of how premiums break down.
Streamlining the authorisation process for new market entrants, and tougher penalties for fraud are also part of the agenda.
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