News Irish News

Tuesday 27 September 2016

Secret settlements to be revealed in effort to stall spiralling insurance costs

Published 08/06/2016 | 02:30

Fianna Fáil's finance spokesman Michael McGrath Picture: Tom Burke
Fianna Fáil's finance spokesman Michael McGrath Picture: Tom Burke

Secret compensation settlements between insurance companies and victims of road accidents will have to be revealed as part of an effort to clamp down on spiralling premiums.

  • Go To

Fianna Fáil is to demand a new National Claims Register that will force insurance companies to publish anonymised details of every payout they make.

The proposal is an attempt to improve transparency in the sector at a time when motorists have seen prices rise by an average of 35pc.

Insurance Ireland, which represents the vast majority of insurers, has blamed "the spiralling cost of claims".

However, Fianna Fáil's finance spokesman Michael McGrath told the Irish Independent there was a "black hole" when it came to information on the issue.

Up to 80pc of claims lodged with the Injuries Board - which was set up in response to rising insurance costs in 2004 - are now settled outside its remit, regularly in secret deals.

"At the minute, there are public records on the decisions of the Injuries Board and the courts - but there is a big black hole and a deficit of information for at least 75pc of cases," Mr McGrath said.

He said motorists were routinely being hit with "ridiculous hikes" of between €200-€300.

Fianna Fáil will place a motion before the Dáil tonight which will demand that the Government sets up a new task force to investigate the situation. However, the Irish Independent understands Finance Minister Michael Noonan will resist calls for the task force, leaving the Government at risk of losing yet another Dáil vote.

A review of the sector is already under way at the Department of Finance and sources said they expected it "to bear fruit" by the end of the year.

"We have our own review ongoing which we think is worthwhile so we should stick with it," said a source.

The Fianna Fáil motion, which is likely to be backed by Sinn Féin, wants a new body along the lines of the Motor Insurance Advisory Board that was credited will stopping rip-off premiums in the 2000s.

It calls for an examination of "the current turmoil in the insurance market" and proposes legislative reform to increase penalties for false claims.

Mr McGrath said he had engaged with insurers but got contradictory reasons for why prices are rising. "We don't know what level of awards are being agreed so it's hard to evaluate the companies' claims in that regard," Mr McGrath said.

His proposed task force would involve the departments of finance and enterprise, the Central Bank, Road Safety Authority, An Garda Síochána, consumer representatives, the Injuries Board and others.

A spokesperson for Insurance Ireland said there was a "well-defined issue with the cost of claims which must be addressed".

They noted a Central Bank finding that the average cost of claims in motor accidents rose by 8pc between 2012 and 2014.

Insurers want the role of the Injuries Board to be strengthened and to increase sanctions for people convicted of fraud.

They also want payouts to be internationally benchmarked to ensure levels of awards are on similar levels to other jurisdictions.

Irish Independent

Read More

Promoted articles

Editor's Choice

Also in Irish News