The Government is to establish a new commission headed by a former High Court judge to carry out international comparisons of Ireland's personal injury awards in a bid to force down premiums.
Thirty-three recommendations will be made to the Cabinet today in a report produced by a group set up last year under the charge of Minister of State Eoghan Murphy.
Under the plan, a national claims information database operated by the Central Bank will be set up within 18 months to hold motor tax, insurance and driving records of every motorist, and NCT details of every vehicle.
The necessary legislation to create the database – which has been long sought by the insurance industry – will be passed by the end of the year, according to the Murphy proposals.
One of the key recommendations of the as-yet-unpublished report is to establish a new personal injuries commission, to be chaired by retired High Court judge Mr Justice Nicholas Kearns.
It would examine payouts for soft-tissue injuries such as whiplash and compare them directly with average awards in other jurisdictions. However, it would also grade some injuries to ensure more consistent payouts.
The final level of awards made in court will still be set by the judiciary and guided by the so-called book of quantum, a guide used by the Injuries Board when assessing compensation for claims.
Clarity and transparency
Nevertheless, the Government believes providing greater clarity, certainty and transparency will reduce the level of payouts and in turn reduce insurance premiums.
Whiplash accounts for up to 80 per cent of all motor insurance claims, with payments ranging up to €19,400. In the United Kingdom, the maximum payment is €7,600.
Figures from the Central Statistics Office show the cost of car insurance has risen by 51 per cent since January 2011.
The Government believes the database will help to identify repeat claims and would make it easier to catch uninsured drivers. Gardaí will also be given resources to allow for automatic number plate recognition.
The cost of the proposals are not identified, though the report says “appropriate resource requirements will have to be found in the Departments of Finance, Jobs, Enterprise and Innovation, Justice and Transport”.
The report stresses there is no “silver bullet which will result in an immediate drop in insurance premiums”.
“The reason why we are in this current position is attributable to a range of factors including the fact that the industry under-priced for a number of years in order to gain market share, the continuing low interest rate environment and lack of return on investment, the increased frequency and cost of claims etc, coupled with a number of uncertainties that are leading to increased reserving for future claims,” the report says.
