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Tackling the Crippling Cost of Insurance

With the proliferation of employer and public liability insurance costs, Orla Donovan explores new proposals for reform

In Brief: Significant recommendations and 29 associated actions to stabilise employer and public liability insurance costs have been published by The Cost of Insurance Working Group (CIWG). Key proposals include:- Encouraging transparency through the establishment of an insurance price index; Limiting personal injuries awards; and Formulating guidelines on suspected fraudulent claims.

Against the backdrop of the motor insurance report last year, the CIWG published a report on the Cost of Employer and Public Liability Insurance (the “Report”) on 23rd January 2018. The volatility of employer and public liability costs for businesses is examined and the Report proposes new measures to tackle this. Within the coming year, legislative, legal, and regulatory changes are envisaged, some of which are set out below.

Sharing of Data to Increase Transparency

The Central Statistics Office has been requested by the CIWG to carry out a feasibility study into the collection of price information on the cost of business insurance, through a price index. Going forward, pricing consistency will be of paramount concern to businesses and insurance companies alike.

With the assistance of the Central Bank, the merits of a nationwide claims database will also be investigated. This would enable a streamlined approach for insurance companies to access data on historical claims through a centralised system.

The CIWG further recommended that the Court Service publish the results of personal injuries cases to provide clarity around court awards.

Limitation of Damages

The Report highlights a climate in which plaintiffs have nothing to lose in pursuing litigation, as, invariably, greater awards are received in court than through the Injuries Board process. This, coupled with the inconsistency of court awards, has led to volatility of insurance pricing.

In a bid to tackle this issue, the CIWG asked the Law Reform Commission to review the possibility of developing constitutionally sound legislation to cap the amount of damages that a court may award in all categories of personal injuries.

Enhancing the Injuries Framework

The CIWG seeks to improve efficiency, notification requirements, fraud prevention and judicial training through numerous measures. Methods for tackling fraud include developing guidelines by Insurance Ireland, An Garda Síochána, and the DPP for reporting suspected fraudulent claims.

Suitable training and information supports for the judiciary to allow for real consistency in awarding damages has also been proposed. The Department of Justice and Equality has been asked to consider an amendment to the Judicial Council Bill to facilitate this.

Conclusion

For businesses and insurance providers alike, the CIWG’s proposals are certainly a welcome development. It will be interesting to see how the proposed process will interact in the future with the General Data Protection Regulation which came into force on the 25th May 2018. For now, it remains to be seen if the CIWG’s recommendations will be implemented with sufficient teeth to stabilise crippling business insurance costs and reform the current system.

2018-11-13T10:46:10+01:00July 9th, 2018|Publications|