Michael D’Arcy: ‘I do not want to be the one who allowed bouncy castles to vanish’

Insurance reform was one of the hot topics of last year as Michael D'Arcy, Minister of State at the Department of Finance, was charged with finding solutions to a burning issue for consumers and businesses across the State.

A number of reforms have been introduced to tackle rising motor premiums, with the new judicial council being the latest piece of the jigsaw. It was legally established last month and is charged with creating guidelines for awards in personal injuries cases, and sentencing guidelines.

But with the clock ticking down on the tenure of the current Fine Gael-led Government, D’Arcy is keen to push through legislation in the coming weeks that he believes would benefit every small business, sports club and adventure centre in the State.

One of these concerns waivers that people sign when they visit a premises and undertake an activity.

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“We are looking at strengthening waivers by making a straightforward amendment of the Civil Liability Act 1961,” he says. “This will protect owners of property providing sporting and recreational activities, and also sports clubs.”

According to the Minister, the current legislation “just doesn’t work” in protecting clubs and organisation from claims. “We can improve the legislation around waivers so there’s a knowledge and an understanding that when you sign this, it is strong, it’s solid and it will stand up in court.

“Otherwise, there will be no insurance and no businesses. We can’t allow that to happen.

“I believe we can do this very quickly. It’s not a full piece of legislation. It’s taking what’s there and improving it and reshaping the law.”

The other area he is keen to change concerns the Occupiers Liability Act 1995. “This piece of legislation allows liability to be restricted by way of a notice: put simply, a signed waiver isn’t required. Reasonable steps should be taken to bring the notice to the attention of visitors.”

Duty of care

The Minister notes that there are three types of entrants to a premises covered under this legislation – visitors, recreational users and trespassers.

“A different duty of care should be given to each of these three,” he says. “A higher duty of care is owed to visitors . . . to ensure that a visitor to the premises does not suffer injury or damage by reason of any danger which may exist on the premises.

“However, this duty does have regard to the care that a visitor may reasonably be expected to take for their own safety. In the case of trespassers and recreational users, the duty is not to injure them intentionally or act with reckless disregard for their safety.”

He cites a "near miss" for Athy rugby club, which last year struggled to secure public-liability insurance and was threatened with closure. "I have to try and protect clubs and organisations around the country in terms of insurance."

The Minister says this change can be done by codifying existing case law.

D'Arcy has some personal knowledge of these matters as chairman of his local GAA club in Wexford, Kilanerin-Ballyfad. He says the club's insurance premium has doubled within three years from "about €2,000 to €4,000 or thereabouts. We've spent millions as a small local GAA club on the facilities over decades, pitches, dressing rooms, clubhouse, walking track, fully floodlit."

Insurance companies have to treat their clients and those impacted by negligence better than they do

D’Arcy has no data to back up his assumptions on these two issues but is determined to press ahead. With the possibility of an election in February, time is against him.

"This can be done in weeks if I can get the support of Government," he says. He'll also need the backing of Fianna Fáil.

Bouncy castles

The Minister is also working to secure an underwriter for bouncy castles, where operators are currently unable to secure insurance. He received an approach from a broker and an agreement with an underwriter and reinsurer is close to being concluded to “make sure pricing is available for bouncy castles”.

“It’s just about over the line, not quite there yet. There will be someone offering insurance for bouncy castles . . . at a commercial rate. I don’t want to be the Minister who allowed bouncy castles to vanish.”

Many headlines and much airtime has also been given to the challenges facing creches and the hospitality sector in securing insurance. D’Arcy says the blame for the many insurance issues of recent years lies with a number of parties.

"Some lawyers are operating in my view not in a correct way. They keep cases running for years, the reserve is on the books [of insurers] for years. The lawyers need to up their game in relation to those firms who are ambulance chasers; the Law Society needs to deal with that.

“If it goes to court potentially there’s a huge payout. We need consistency in awards and that has to come from the Judicial Council.

“The insurance companies equally have to treat their clients and those impacted by negligence better than they do. There are too many cases going to the insurance ombudsman. That’s not good enough. They need to treat people better in relation to settlement channels.”

Motor insurance

Last month, the Central Bank published a report with extensive data on motor insurance claims. The regulator said Irish insurers made a profit margin on motor of 9 per cent in 2018, almost double the level of the UK. Are they profiteering?

“I think they are on the high end of profitability. The levels of profit are close to being excessive. Are they trying to make up ground that they lost in previous years? Yes, they are.”

D’Arcy says measures could be taken in the next budget to penalise insurers if such levels of profitability continue, including potentially some form of extra taxation.

“I want to make sure we have 2019 numbers [on motor insurance] before Budget 2021 to see how profitable they were,” he says. “They need to reduce their premiums or increase their risk horizons. If they don’t do that then it’s a matter for budgetary strategy. It could be additional taxation for the insurance sector.

“It’s not the direction I want to go. I want them to have a better pricing model to give their customers a better opportunity not to pay a higher rate,” he says, adding that customers need to shop around, too.

I'm really disappointed that the Judicial Council Bill wasn't passed sooner

D’Arcy says his own motor premium came down last year. He has 11 insurance policies altogether, including for his farm in Wexford. “Axa entered [the farming sector] about a year ago and I compliment them entering the sector and bringing more competition.”

The Minister, who was appointed to his current post in mid-2017 and given responsibility for insurance reform, disagrees that it was a poisoned chalice.

“It’s a challenge. If I’d known then what I know now, I would have moved the legislation immediately. Nobody gives an inch. Lawyers, insurance companies, regulators, judges. Nobody was prepared for reforms and everybody had to be pushed along.

“Nobody will say that what I’ve done hasn’t been in the right direction. My self-criticism is the pace of it. I’m really disappointed that the Judicial Council Bill wasn’t passed sooner but I don’t think people would criticise what I’ve done. I don’t mind ruffling feathers . . . and I’m not taking my foot off the accelerator on insurance reform.”