The dramatic fall in personal injuries awards during the two months of operation of new guidelines will have an impact on insurance premiums, Tánaiste Leo Varadkar has said.
According to preliminary findings of a new report, the drop in awards came about following the introduction of new guidelines which set out levels of damages that may be awarded or assessed in respect of personal injuries. They reduce the award levels for most categories of injury.
The update on the Government's Action Plan for Insurance Reform, which was due to be brought to Tuesday's Cabinet meeting, cites data from the Personal Injuries Assessment Board (PIAB).
It suggests that there has been a significant fall in the value of awards since the long-awaited new personal injuries guidelines came into operation on April 24th. The report is understood to show that the guidelines have had an impact, with the latest figures showing that 78 per cent of awards were €15,000 or less now, compared to some 30 per cent last year.
However, neither Mr Varadkar nor Minister of State for Insurance Sean Fleming said they were in a position to say by how much premiums would fall.
“It should mean a meaningful and recognisable fall in premiums,” Mr Varadkar said, adding he could not say at this stage if they would fall by a particular figure.
“We want them to explain why premiums aren’t falling if they don’t fall and that can’t be on the basis of profit,” he added.
“[Insurance companies] should not allow this to work its way through the court system. They should be in a position to reduce insurance premiums right away,” he said.
Mr Fleming said: “Some of [the insurance companies] have reported a fall but some have said they will need a few months [before determining the extent].”
The level of awards that have been agreed since April 24th, when the new guidelines drawn up by the Judicial Council came into effect.
Mr Varadkar and Mr Fleming held a media briefing at Dublin Castle following the Cabinet meeting where they presented an update of the action plan on insurance reform. 34 of the 66 aims have been implemented to date, the Ministers said.
Data supplied by the Personal Injuries Assessment Board (PIAB) for the memorandum pointed to a substantial reduction in the quantum for awards. It found that 78 per cent of awards were €15,000 or less now, compared to 30 per cent last year.
Among the major goals in the action plan completed are reforms of perjury legislation and the setting up of new office to ensure competition in the insurance market.
The Personal Injuries Guidelines were published by the Judicial Council which is a body composed of all judges in Ireland. Minister for Justice Helen McEntee commenced the new system on April 24th.
Under the new guidelines, the levels are substantially lower than previous levels for a significant number of injuries, while they are higher in a small number of categories. The new guidelines are also more granular and cover a broader range of personal injury types.
The Alliance for Insurance Reform on Tuesday called on insurance companies to cut premiums following the drop of 50 per cent in awards in personal injury cases.
The organisation's director Peter Boland said insurance costs in Ireland had been an "existential issue" for the past five years and despite the drop in awards in the last two months, there had been no reduction in premiums.
Speaking on RTÉ radio's Morning Ireland, Mr Boland warned that Irish society will not recover at pace unless "this is sorted out".
There were 35 sectors who still could not get insurance cover and he was calling on the Government to “get a move on this issue.”
The sectors involved could not wait for the remainder of the requirements on the action plan to come through. The impact of the new guidelines should have happened back in March, he said.
Ireland was completely out of line with the rest of Europe when it came to insurance, he added. It was “farcical” to still be talking about insurance as “an existential issue” while it was just another utility bill elsewhere.