Government to use first ‘guillotine’ to put deadline on insurance debate

The Government will use a guillotine for the first time since it came into office to pass legislation to deal with the fallout from the collapse of Setanta Insurance group in 2014.

Measures in the Insurance Amendment (Bill) once passed will mean that Setanta customers with claims will have them met in full by the Insurance Compensation Fund, responsibility for which transfers to the Central Bank.

Claims from the Insurance Compensation Fund are currently restricted to 65 per cent or €825,000, whichever is lower. Under the Bill 100 per cent of personal injury claims will be met. Currently 1,577 Setanta claims are still open and 751 claimants have not received any compensation at all.

The Bill will also deal with future cases where motor insurance companies go into liquidation.

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It had been expected that the Bill would be referred to a select committee which meant it would be the autumn before it came back to the Dáil to be passed.

But following complaints from TDs, the Dáil business committee agreed that the committee, report and final stages of the legislation will be dealt on Thursday with a one hour guillotine or deadline on the debate.

In a move announced by Government Chief Whip Minister of State Joe McHugh that the House would consider the Bill and only amendments from the Minister for Finance will be accepted.

Debate on the controversial Road Traffic Amendment Bill had been cut short after Social Democrats TD Catherine Murphy called for section 68 of the Dáil’s standing orders or rules to be invoked to end a filibuster on the legislation.

But the insurance legislation is the first Bill the Government has imposed a deadline on.

During finance questions in the Dáil Minister of State for Finance Michael D’Arcy who is steering the legislation through the Oireachtas said “the reason insurance is high in this jurisdiction is because of the level of awards”.

He expressed surprise that during the debate on the second or introductory debate stage of the Bill, nobody talked about the cost of awards.

The Department of Finance did a report comparing Irish insurance awards with the UK and found that “Irish awards are between three and five and a half times more than a similar award in the UK. We are out of kilter with most other jurisdictions,” the Minister said.

“This is the big issue we have to deal with,” and he had no function in reducing awards. That was a matter for the Law Reform Commission.

Fianna Fáil finance spokesman Michael McGrath said the Minister “seems to be saying is that we are heading towards a referendum if we want to deal with the issue of the level of awards which are impacting on the insurance industry and consumers”.

Sinn Féin finance spokesman Pearse Doherty said that anybody injured in a motor accident who had a legitimate claim should be paid an award. He said the issue was that in some cases people were over claiming and the courts were not questioning those issues.

But he pointed out that “the insurance industry is under investigation for cartel-like activity. We need robust legislation and action from the Government which deals with this not only for motor insurance but for businesses as well and the community sector.”

But the Minister said “the sanction for people who represent an exaggerated or fraudulent claim is a fine of €100,000 or prison or both. We do not need any more than that.”