Office to Promote Competition in the Insurance Market

Introduction

Competition is an important element of a healthy financial services sector, in order to help maximise consumer choice and ensure that various products remain affordable.

When the 2020 Programme for Government document was agreed, it was felt that competition in parts of the Irish insurance market could be enhanced. Accordingly, the Programme for Government included a commitment to create an office tasked with encouraging greater competition in the Irish insurance market. The Office to Promote Competition in the Insurance Market was thus established in December 2020.

This was just one of many commitments included in the Action Plan for Insurance Reform, published in December 2020. The most recent Action Plan Implementation Report – the fourth – was published in February 2024 and can be found here.

Insurance Reform to Date

Significant progress has been made on the Government’s insurance reform agenda. Given that the implementation of the Action Plan is ongoing, and taking into account wider economic factors, it is important to allow time for the impact of these policy reforms to materialise.

Achievements include:

1. The introduction of new Personal Injuries Guidelines: Introduced in April 2021, six months ahead of schedule, these set reduced levels for personal injury compensation and changed the amounts of General Damages to be awarded by the Courts and by the Injuries Resolution Board. Data from the Injuries Resolution Board published in December 2023 shows that in 2022 award levels have declined by an average of 35% against those in 2020, thus bringing stability and predictability to the claims environment. In addition, these data show that the Injuries Resolution Board acceptance rate has increased to 49% in June 2023, compared to 36% in May 2021, and is nearing the pre-Guidelines level (of 50%).

More information on the Personal Injuries Guidelines can be found on the website of the Judicial Council, here.

2. Reform of the Injuries Resolution Board: The Personal Injuries Resolution Board Act 2022 was signed into law by the President in December 2022. This Act enhances and reforms the Injuries Resolution Board. The Act was commenced in stages, with the first phase of provisions commenced on 13 February 2023 and the final phase commenced on 14 December 2023. The Act allowed for the following changes:

• The Injuries Resolution Board can now provide mediation as a means of resolving a claim in employer liability claims (mediation in public liability claims and motor claims will be introduced during 2024);
• The retaining of claims previously released by the Injuries Resolution Board;
• Giving the Injuries Resolution Board a role in providing information analysis and awareness raising; and
• A requirement for proof of identity (PPS Number) and confirmation that the medical report provided at the time of a claim contains details of the injuries sustained in the incident which gave rise to the claim and the disclosure of information to An Garda Síochána to reduce fraud.

These reforms should encourage more claims to settle at the Injuries Resolution Board stage instead of proceeding to costlier and time-consuming litigation.

More information on the Injuries Resolution Board can be found on its website, here.

3. Perjury Law: The Criminal Justice (Perjury and Related Offences) Act 2021 was signed into law in June 2021 and commenced in full on 28 July 2021. This made perjury a statutory offence for the first time and will therefore help address insurance fraud.

4. Tackling Fraud: An Insurance Fraud Coordination Office (IFCO) has been established within An Garda Síochána. This will allow for uniformity in the reporting and processing of cases of suspected fraud, as well as offering support to Divisional-level investigations and providing accurate statistics on the number and trends of cases.More information on fraud can be found on the An Garda Síochána’s website here.

Additionally, on 24 October 2023, Memoranda of Understanding for reporting insurance fraud were signed by An Garda Síochána, Insurance Ireland and the Alliance for Insurance Reform. The formal signing of the Memoranda of Understanding fulfils the government’s commitment to increase cooperation between An Garda Síochána and the insurance industry to tackle fraud. More information can be found here.

5. Strengthening of the CCPC: The Competition (Amendment) Act 2022 was signed into law in July 2022, and most of it was commenced on 27 September 2023. The Act reforms competition enforcement and the powers of the Competition and Consumer Protection Commission (CCPC), by the transposition of the ECN+ Directive. The ECN+ Directive includes powers for competition authorities (CCPC and ComReg) to avail of administrative / civil sanctions and leniency / immunity measures as well as the imposition of interim measures for breaches of EU competition law.

More information on the CCPC can be found on its website, here.

6. Rebalancing the “common duty of care”: The Courts and Civil Law (Miscellaneous Provisions) Act 2023 was signed into law on 5 July 2023. Part 6 of the Act rebalances the “common duty of care” (in line with the Government policy objective of restricting the liability of occupiers) via amendments to the Occupiers’ Liability Act 1995 as follows:

• Inserting into primary law a number of recent court decisions which rebalance the duty of care owed by occupiers to visitors and recreational users;
• Changing the standard to clarify that when the occupier of a property has acted with reckless disregard for a visitor or customer, it is the standard of reckless disregard rather than reasonable grounds which should apply in relation to any consideration of liability;
• Limits to the circumstances in which a court can impose liability on the occupier of a premises where a person has entered onto premises for the purpose of committing an offence; and
• Allowing for a broader range of scenarios where it can be shown that a visitor or customer has voluntarily assumed a risk resulting in harm.

It is expected that this reform will prove beneficial to businesses, and community, sporting and voluntary groups. The Minister for Justice commenced Part 6 of the Act on 31 July 2023 via the Courts and Civil Law (Miscellaneous Provisions) Act 2023 (Commencement) Order 2023 (S.I. No. 389 of 2023).

Competition Promotion

The Government’s efforts to reduce insurance costs and increase the availability of cover by promoting competition in the Irish insurance market can be grouped into three broad themes:

1. Encouraging greater competition between existing insurers in the Irish market, including through expanding product offering.

2. Encouraging new entrants to enter the insurance market, be they new domestic companies, companies “passporting” in from EU/EEA member States, or companies from third countries outside the EU/EEA.

3. Considering new initiatives by the State to assist in advancing the above objectives.

However, in any attempt to intervene in the workings of the insurance market, it is important to bear in mind that the Government must have regard to the following: the EU Directives pertaining to insurance; EU state aid rules; EU and national competition law; and the statutory independence of State bodies.

The Office to Promote Competition in the Insurance Market

The Office to Promote Competition in the Insurance Market was established on 16 December 2020. The Office is under the responsibility of the Minister of State at the Department of Finance, who acts as Chair. The Terms of Reference and the Work Programmes for 2021, 2022 and 2023 can be found below.

Responsibilities of the Office:

The Office to Promote Competition in the Insurance Market has the following responsibilities:

• Advance the Government's work on insurance reform so as to encourage greater competition in the Irish insurance market;
• Develop a strategic approach to the promotion of insurance competition – in this context an annual work plan has been developed, in consultation with relevant Department/Agencies, so as to ensure coherence and consistency of approach between relevant State bodies;
• Promote transparency and champion the provision of information in relation to the insurance market and various insurance products;
• Tailor its approach reflecting the particular circumstances pertaining in the business sector and that of the wider consumer market which may have different priorities;
• Provide for more joined-up policy thinking and communications; and
• Report to the Cabinet Committee Sub-Group on Insurance Reform on the work of the Office.

Composition of the Office:

• Chair (Minister of State for Financial Services, Credit Unions and Insurance at the Department of Finance, Neale Richmond, T.D.)
• Relevant Officials from each of the following:

-The Department of Finance (D/Finance)

-The Department of Enterprise, Trade and Employment (D/ETE)

Other Departments, Agencies, and stakeholders, that inter alia could assist the work of the Office, are regularly invited to update and advise the Office on insurance competition issues. In this regard, the following organisations have been invited to meet with the Office:

• Central Bank of Ireland (CBI)
• Competition and Consumer Protection Commission (CCPC)
• IDA Ireland (IDA)
• Motor Insurers’ Bureau of Ireland (MIBI)
• Injuries Resolution Board
• State Claims Agency (SCA)

Insurance Databank for New Entrants

The 2020 Programme for Government and the Action Plan for Insurance Reform both commit to the creation of a databank for new insurance market entrants in the Central Bank of Ireland. This was launched on 8 February 2022 and is a useful resource for providers who are considering entering here, as it provides an accessible ‘one stop shop’ access to key sources of information on the Irish insurance market, such as the National Claims Information Database (NCID) and Solvency Financial Condition Reports (SFCR). The databank is available on the Central Bank’s website here.

Contact Details and Further Information

The Office can be contacted at insurancecompetition@finance.gov.ie

Further information on the Cabinet Sub-Group on Insurance Reform can be found here:

Cabinet Committee Sub-Group on Insurance Reform