Insurance premiums could be reduced by up to 30 per cent within the next two years if proposed market reforms are acted upon without delay, the chairman of an Oireachtas committee said yesterday.
Speedy enactment of Government legislation and a positive response from the insurance industry would bring premiums down dramatically, said the chairman of the Oireachtas Committee on Enterprise and Small Business, Fianna Fáil TD Mr Donie Cassidy.
"It's unsustainable that small family businesses are making repayments on insurance premiums to their bank manager over a 12-month period. That can't continue. As a committee and Government, we can't allow it," he said.
Committee members also said they had been "misled" and had "not been told the full story" by insurance firms over the financial health of the industry during their hearings.
This follows the release of figures in recent days which showed that the industry made record profits of €183 million on motor cover last year.
As a result, the Irish Insurance Federation (IIF) is to be recalled before the committee and will be asked to explain the reasons for the cost of motor insurance despite healthy profit margins.
Committee member, Labour TD Mr Howlin said: "It's hard to accept that there wouldn't have been a very clear understanding of the 2002 figures when they came to the committee in recent weeks. The picture that was uniformly painted was one of a dysfunctional sector of the industry which could not attract foreign players because it was intrinsically unprofitable."
The Irish Insurance Federation rejected the criticism and said it was clear for several months that the motor insurance market was improving, while areas such as public and employers' liability were still loss-making.
The federation's spokesman, Mr Martin Long, said the industry was fully committed to reforming the market, but pointed out that individual companies had been publishing positive results on motor cover for 2002 since the beginning of the year.
"Deputy Howlin should also be aware that, in order to foster a pro-enterprise culture and encourage other companies to enter the market, we have to make profits and sustain them. We need the support of politicians and stakeholders in that regard, not criticism," Mr Long said.
Mr Cassidy also said the committee wanted to see policy-holders beginning to see the benefits of insurance reform from the start of next year.
He said this would be possible if four major pieces of legislation, which relate to court reform, alternatives to the courts for assessing personal injury damages and road-safety measures, were enacted by this year's end.
The quickest way of reducing premiums, Mr Cassidy said, was by impounding uninsured cars which account for around 10 per cent of premiums at present.
He said that, at a conservative estimate, there were 80,000 uninsured cars on the road, and that measures to impound the vehicles could be taken by regulation without needing to amend existing legislation.
In an unprecedented move, Mr Cassidy said they would be seeking the co-operation of a member of the judiciary, Mrs Justice Denham, chairperson of the Committee on Court Practice and Procedure, to examine aspects of personal injuries litigation.
