Fianna Fáil has pledged to increase penalties for fraudulent insurance claims and to force fraudulent claimants to pay the legal expenses for defendants.
The party began the third week of the general election campaign by outlining its plans to tackle insurance costs.
Finance spokesman Michael McGrath said Fianna Fáil would immediately call a “crisis summit” if it is in the next government and would attempt to introduce legislation to cap payouts. If this is not successful or possible the party says it would call a referendum to allow payouts to be capped.
Mr McGrath accused the outgoing Government of having a “completely hands-off approach” to insurance reform at Cabinet level.
“This issue did not feature at Cabinet level in as far as we can establish. At the end of the day, what this issue boils down to is play centres that have had to close, businesses that face the inevitable process of closing. This is a dysfunctional market. The failure to implement insurance reform is doing enormous damage to our society. And this crisis is growing.”
The party also said it would regulate claims management companies and would establish a publicly-funded Garda fraud unit.
A working group set up by the Government four years ago to look at rising insurance premiums recommended a dedicated Garda unit – to be financed by insurers – to deal with fraudulent and exaggerated personal injury claims.
It is estimated fraudulent claims add on average €50 to insurance premiums a year.
‘Rip-off’
Meanwhile Sinn Féin’s finance spokesman Pearse Doherty has accused Fine Gael of having “a poor understanding of the insurance crisis”.
His party will outline its plans for tackling soaring premiums when it launches its manifesto on Tuesday.
“Sinn Féin will tackle the industry and end the insurance rip-off. We would ban dual pricing by insurance companies, set up a Garda insurance fraud unit and bring down prices for consumers who are seeing costs soar,” Mr Doherty said.
Last week the Irish Hotels Federation (IHF) expressed its disappointment at the election manifestos published by Fine Gael and Fianna Fáil in relation to insurance reform. Michael Lennon, president of the IHF, said the policies don’t go far enough.
“Both parties have recognised that increased insurance costs are affecting the viability of many businesses. While we welcome Fine Gael’s commitment to broadening the insurance market and making perjury a statutory offence, and Fianna Fáil’s pledge to establish a Garda fraud unit, there is nothing that gives confidence that the pace of reform will accelerate sufficiently and in a timely enough manner to address the damage that is being done to the viability of businesses today.”
Retailers have also called for a reduction in VAT and the introduction of emergency legislation to tackle rising insurance costs as part of a series of appeals to political parties ahead of the general election.
The rising cost of insurance has forced the closure of some businesses and threatened the viability of others, particularly in the childcare, hospitality and leisure sectors, while also hurting consumers in their pockets. Insurers have been accused of excessive profit-taking as a Central Bank report last month showed that the cost of motor insurance claims fell by 2.5 per cent in the last decade, while premiums rose by 42 per cent. The report found that insurers made an average profit of 9 per cent last year, leading to accusations that customers were getting a raw deal.
