RGDATA calls for emergency measures to prevent spiralling insurance costs
RGDATA has proposed that government should adopt the approach taken in dealing with bankers’ bonuses by introducing a Supertax on the profits of insurance companies - if the levels of premiums do not start to come down sharply. Spiralling premiums are threatening businesses with closure while insurance companies' profits rise.
16 April 2019 | 0
RGDATA has called on the government to immediately introduce emergency measures aimed at preventing the closure of businesses due to unmanageable insurance costs. Strong action needs to be taken by government, the association said, if the behaviour of the two key vested interests involved is to really change: that of the insurance companies and solicitors advancing bogus personal injury claims.
In its proposal, RGDATA said the government should adopt the approach taken in dealing with bankers’ bonuses by introducing a “supertax” on profits of insurance companies, if the levels of premiums do not fall sharply.
Last year, three of Ireland’s major insurance companies enjoyed profits of €200m, at the same time that their customers are experiencing difficulty in getting cover due to rising costs. In short, these levels of profitability cannot be justified, according to RGDATA director general Tara Buckley in a typically fiery statement.
“When bankers threatened to reintroduce bonuses for top staff,” Buckley said, “the government responded with a Supertax which stopped bankers in their tracks. The prospect of a similar tax on insurers would be a game changer. It would compel these companies to adjust their behaviour and actions or else face penal taxation rates. The choice would be theirs.
“At present the insurers are benefitting from reform,” Tara Buckley added, “but channelling their change into their shareholders’ pockets rather than supporting their struggling policy holders. This has to stop now.”
Buckley also called for new responsibilities to be imposed on solicitors prosecuting personal injury claims on behalf of clients. In light of changes requiring solicitors to verify the authenticity of asylum claims, she said that similar measures should be imposed on personal injury cases.
“Some solicitors act as if they are spectators,” Buckley said, “disclaiming any knowledge or responsibility when bogus or exaggerated claims are uncovered.
“These individuals should be compelled to put clients on proof of claims made and damages alleged,” she said. “Where a Court throws out a case, there should be a mandatory referral of the prosecuting solicitor to the Legal Services Regulatory Authority to determine if he or she breached their professional duties in misleading the Court.”
Buckley added that the insurance crisis will not be solved until the government actively tackles the vested interests in the insurance and legal sectors who have so far presented themselves as uninvolved spectators.
“A tough and unrelenting approach is required from government now,” she said.