LAST UPDATE | 8 Dec 2020
OPPOSITION PARTIES HAVE criticised the government’s pledge to introduce a new statutory offence of perjury as part of efforts to reduce insurance fraud and costs to customers, saying the move falls short of imposing necessary changes.
The promise is part of the government’s Action Plan for Insurance Reform which Tánaiste Leo Varadkar said today contains 66 different actions.
Among the actions is legislation that would make it easier to prosecute the offence of perjury.
Sinn Féin spokesperson on finance Pearse Doherty said that the plan “regurgitates many of the actions that were promised under the Cost of Insurance Working Group but which Fine Gael in government have failed to implement since 2016″.
“If anything, this plan is evidence of how little has been done since the first Cost of Insurance Working Group Report,” Doherty said.
“Other actions in the plan are actually an insult to small businesses that have suffered as a result of Covid-19,” he said.
“The plan commits to supporting the Central Bank’s direction on business interruption claims by businesses that closed due to the pandemic – but there has been no direction, no action and no intervention by the Central Bank.
“Instead, small businesses have been forced to go to the courts – at great cost – for compensation they are entitled to under their insurance policies.
Similarly, Labour has said that the plan is aspirational but short on concrete actions.
Labour spokesperson for finance Deputy Ged Nash said that said that the government needs to “urgently move beyond plans and words to actions and implementation”.
“Yet the language contained within the plan, with for example, the pledge to ‘monitor whether personal injury award levels need to be capped’ – seems to me to be a case of kicking a well kicked can even further down the road,” Nash said.
“Sufficient information has been gleaned from the work already done by the Central Bank to show that the practice of dual-pricing is endemic in the Irish market,” he said.
“This is the practice of companies hammering loyal customers who are likely to allow policies to roll over without them shopping around. A strong message should be sent by government and the regulator that this practice will be outlawed in Ireland.”
Speaking at the announcement of the plans today, Varadkar said fraud is “only part of the picture” but that it is an area that is being addressed.
“Legislation going through at the moment is to make perjury a statutory offence, so that is exaggerating false claims being made a statutory offence. It’s a common law offence now so there have been very few prosecutions in recent history,” he said.
Justice Minister Helen McEntee said the perjury law would also work in tandem with “enhanced cooperation between An Garda Síochána and the insurance industry to combat insurance fraud”.
She said that penalties for perjury would be introduced:
The offence of perjury being set out would make a difference and would deter people from bringing forward fraudulent claims, particularly if they feel they are going to be caught.
Other measures outlined in the plan would see new guidelines on appropriate levels of personal injury awards introduced to replace the Book of Quantum.
An enhanced role of the Personal Injuries Assessment Board is to be introduced, as well as an expansion of the National Claims Information Database.
The government has said it will also “monitor whether personal injury award levels need to be capped” but that this would not be considered until the other measures had time to take effect.
The Tánaiste said that he feels it is ‘unlikely’ we’ll see premiums fall in the next few months but that he would be disappointed if they weren’t down in a year from now.
Earlier this year, a Law Reform Commission report found that introducing a cap on damages awarded in personal injury claims would be permissible under Irish constitutional law.
“We’ll try Plan A first and that will be in place by the middle of next year, the option of Plan B remains open to us,” Varadkar said.
The plan for insurance reform comes following the establishment of a working group in 2016 to address the rising cost of insurance for citizens and businesses in Ireland.
It was made up of individuals from across government departments, who met with organisations including Insurance Ireland, the AA, Consumers Association of Ireland and the Law Society of Ireland.
Reacting to the plans today, Insurance Ireland welcomed a number of different aspects, saying that it will “bring focus to reducing the cost of claims in the market for the benefit of policyholders”.
“Insurance Ireland particularly welcomed the recognition of the Personal Injuries Guidelines Committee under the Judicial Council to provide guidance on personal injury claims, as well as the monitoring of whether insurance awards need to be capped,” said Insurance Ireland CEO Moyagh Murdock.
Insurance Ireland believes this is a very important step, which along with the PIAB reforms among other areas, will be vital in achieving real change in Ireland’s cost of claims regime.
The Alliance for Insurance Reform has also welcomed the proposals but has said that change is happening too slowly.
“As a declaration of intent, this plan ticks all the boxes. But progress on real insurance reform has happened at a snail’s pace and the majority of the proposals in the Action Plan have been doing the rounds since the start of 2017,” said Eoin McCambridge, director of the group.
“That is four years of unsustainably high insurance premiums closing down businesses and stopping voluntary groups from doing what they volunteered to do. We call on the government to not treat the timelines in this plan as targets to be aimed for, rather we urge them to speed up the pace of reforms.”
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