Harney's insurance reform advances slowly

A year after it was introduced, 26 of the 67 measures in the Motor Insurance Advisory Board Action Plan for the insurance industry have been implemented, according to an internal review by the Department of Enterprise, Trade and Employment.

At the time of the launch in October 2002 the Tánaiste, Ms Harney, said insurance costs could be cut by more than 30 per cent if all the measures were introduced. She has made insurance sector reform her political priority for this Government.

The plan assigned responsibility for implementing the various measures to Departments and agencies, and in many cases set out a target date for implementation. A progress review, drafted this month by Ms Harney's Department of Enterprise, Trade and Employment, shows 26 of the 67 measures have been implemented. The Department has fully implemented the five measures which were its responsibility.

Justice, Equality and Law Reform has responsibility for 14 of the measures but has only fully introduced one. Most measures within its remit have to do with legal costs, court procedures, and issues concerning payments arising from court hearings.

Along with Transport, it has introduced a measure concerning higher fines and detaining vehicles in cases of flagrant breaches of the compulsory insurance laws. The Department has introduced a further two measures in conjunction with the Incorporated Law Society of Ireland. These concerned consumer protection and advertising by solicitors.

The Department of Transport has responsibility for introducing seven measures, of which it has introduced one, to do with road safety improvements.

The Irish Financial Services Regulatory Authority (IFSRA) has responsibility for seven measures previously the responsibility of Ms Harney's Department. The switch in responsibilities occurred on May 1st, 2003. None of the measures has yet been implemented. They include matters concerning the transparency of information made public by the industry, and the creation of a motor policyholders' protection fund.

The Department of Finance has yet to introduce the one measure it was assigned, which has to do with ring-fencing stamp duty payments on insurance payments. Two measures are the responsibility of Finance and the IFSRA. One has been implemented. It concerns the balance between prudential supervision and consumer protection. Implementation of the second measure, concerning the establishment of a Statutory Office of an Insurance Ombudsman, is "in progress", according to the review.

The IFSRA has responsibility for 11 measures which are additional to those mentioned above, and has introduced three of them. The measures introduced have to do with the monitoring of insurance industry behaviour, the regulation of insurance intermediaries, and the protection of the consumer in the context of mergers. Measures in progress include ones concerning discrimination by the industry, the quality of data released by the industry, the release of information so as to encourage competition and other consumer protection issues.

The Department of Health and Children has not introduced the one measure assigned to it which deals with charges to hospital users who are injured in motor accidents.

The Irish Insurance Federation has introduced 10 of the 12 measures for which it was given responsibility. One measure, the implementation of which is stated to be in progress, concerns standardised renewal notices detailing the calculation of premiums. The second, concerning issues to do with the refusal of quotations on age grounds, is under consideration.

The federation, along with IBEC, is responsible for one measure, which has been implemented and concerned nuisance value settlements.

The Competition Authority, which has responsibility for introducing three measures, has to date introduced one, according to the review.

This has to do with the authority reviewing all future mergers in the insurance sector. The two matters in progress concern professional fees and compulsory motor insurance.