Noonan blames legal costs and huge payouts for high insurance prices
Published 21/04/2016 | 02:30
Finance Minister Michael Noonan has blamed legal costs and lottery-style awards from the courts for driving up insurance premiums.
The minister has blamed an "increased engagement of solicitors in the handling of claims" as one of the main causes for rising costs.
However, Mr Noonan also said that he has no power to interfere in the cost of insurance products.
He noted the number of claims coming before the courts remains "steady" but a greater number of people are taking their case to the High Court, rather than the Circuit Court, in a bid to get a larger pay-out.
"This reportedly leads to cases taking longer to settle and increased cost per claim," Mr Noonan said.
Premiums, particularly for motorists, have soared by as much as 30pc in the past year.
Among a series of reasons listed by Mr Noonan was the "improving economic conditions" and "a comparatively high level of insurance fraud".
A Review of Policy in the Insurance Sector is being undertaken in consultation with the Central Bank and other Departments and Agencies.
His Fine Gael colleague and Jobs Minister Richard Bruton suggested rules which regulate awards handed down by the courts should be reviewed to allow more consistency.
He said this would end claimants "feeling the courts (service) is almost like lottery".
Mr Bruton said more cases should be dealt with by the Personal Injury Assessment Board (PIAB) as a "non-legalistic" alternative, pointing out that awards have remained "stable".
"They handle about 12,000 out of 34,000 [claims], handling less than a third," he said.
"We need to have much more knowledge of what is happening outside the PIAB than inside."
But Fianna Fáil's Dara Calleary said that the board was limited by the legal service.
"It has frustrated at every turn at a legal community who do not want to lose control of this particular market," he said.
"It is a very lucrative market for themselves."
On flood insurance, Mr Noonan said it was important that homeowners in at-risk areas have access to cover.
"A fully functioning insurance sector should be able to provide this at a reasonable cost," he said.
"My officials are undertaking research in the area of flood insurance which will include an analysis of the different approaches to flood insurance taken in other countries."