A group calling for insurance reform has urged the Government to follow the UK in drafting laws to curb compensation amounts.
The Alliance for Insurance Reform (AIR), which is made up of 20 businesses and civic organisations across the Republic, said a medium-to-long term plan to reform the industry was “not fast enough” because businesses were going out of business because of prohibitive costs.
Peter Boland of AIR said that because legal structures in the UK were similar to the Republic, there was no good reason insurance reform could not happen sooner.
Britain plans new laws to cut the number of whiplash claims from car accidents and change the calculation of personal injury payments, a move which should lower costs for insurers and motor premiums for drivers.
Britain’s ministry of justice said it would set fixed compensation amounts for whiplash claims and require medical evidence before claims are settled. It is also changing the interest rate used to calculate how much in compensation should be paid by insurers for personal injuries, cutting the size of payments.
Here, the Government-backed cost of insurance working group delivered a report on motor insurance in early 2017, and then published a report on employer and public liability insurance in January. The report called for a review of damages in personal injuries as well as tackling fraud and exaggerated claims.
However, the pace of reform since the group was set up has been criticised.
Mr Boland said: “Vested interests in Ireland are stronger than in the UK and that has led to reform not happening at the urgent pace that is needed.
“It is up to the Government to decide how serious it is about reform, and it should follow the UK government’s lead. Meanwhile, Irish businesses are being forced to close because of the costs. Three to five years for reform is not fast enough.”
- Additional reporting Reuters