Sunday 20 October 2019

Retailers call for a super tax on premium-hiking insurers

Cost control: RGDATA director general Tara Buckley wants radical reform
Cost control: RGDATA director general Tara Buckley wants radical reform

Charlie Weston, Personal Finance Editor

Insurers should have a super tax imposed on them if they fail to pass on cuts in premiums at a time when they are benefiting from reforms, a leading retailer representative body has said.

The Retail Grocery Dairy and Allied Trades Association (RGDATA) also called for solicitors that represent claimants in bogus and exaggerated court actions to face a mandatory referral to the new Legal Services Regulatory Authority.

Retailers are faced with closure because of the insurance crisis, the body said. It called on the Government to tackle what it called vested interests - the legal sector and insurance firms.

RGDATA, which represents independent retailers, said emergency measures were needed from the Government "to prevent further business closures due to high insurance costs". It proposed that the Government copy the approach taken to deal with bankers' bonuses by introducing a super tax on insurance firms' profits if premiums don't come down sharply.

RGDATA director general Tara Buckley said: "When bankers threatened to reintroduce bonuses for top staff at a time when many customers were struggling, the Government responded with a super tax which stopped bankers in their tracks." She said the prospect of a similar tax on insurers would compel them to adjust their behaviour.

"At present, the insurers are benefiting from the reform but channelling their change into their shareholders' pockets rather than supporting their struggling policyholders. This has to stop now."

She said there was a need to impose responsibilities on solicitors taking injury claims.

In light of changes requiring solicitors to verify the authenticity of asylum claims, similar measures should be imposed in personal injury cases.

"Some solicitors act as if they are spectators and disclaim any knowledge or responsibility when bogus or exaggerated claims are uncovered," she said. Solicitors should be compelled to put clients on proof of claims made and damages alleged.

And where a court throws out a case for being exaggerated or fraudulent, there should be a mandatory referral of the prosecuting solicitor to the Legal Services Regulatory Authority to determine if he or she breached their professional duties or were actively complicit in misleading a court and the business defending the claim, Ms Buckley said.

She said that it was clear that the insurance crisis will not be solved until the Government tackles what she described as the vested interests in the insurance and legal sectors who have so far presented themselves as uninvolved spectators.

Junior Minister with responsibility for insurance reform Michael D'Arcy said this week this country has "highest levels of awards in the world" which are pushing up premiums and collapsing businesses.

"Those levels of awards are coming from the judiciary." Mr D'Arcy said people are getting tens of thousands of euro for what he described as "pretty inconsequential injuries".

Irish Independent

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