ESCALATING insurance premiums together with fraudulent and exaggerated claims are putting jobs and businesses at risk in the region, a public meeting was told in Tullamore on Monday night last.
Calls for a major overhaul of the insurance industry were made by speaker after speaker while insurance firms and the legal profession came in for harsh criticism.
The meeting, organised by local Fianna Fail Deputy, Barry Cowen, was addressed by the CEO of Supermac’s, Pat McDonagh who has spearheaded a national campaign to reform the insurance industry.
Mr McDonagh gave details of fraudulent claims against his own business including that of a 16-year-old girl who had a history of six previous claims.
He also played cctv footage from his businesses, including the Obama Plaza in Moneygall, showing people deliberately faking accidents by wetting floors in toilets and staging incidents in his restaurants.
The footage showed perpetrators staging trial runs before completing their “falls” on toilet floors which they had sprinkled with water beforehand.
Mr McDonagh said legal fees in actions which his firm had defended through the courts system had amounted to in excess of €100,000 on occasion.
He also detailed how small firms were being put out of business by rocketing insurance costs and instanced the case of a former Galway hurler whose annual premium increased from €2,500 to €25,000 forcing him to shut up shop.
Mr McDonagh also cited the case of a business employing 30 people whose annual premium had increased to €30,000, the figure the owner had set aside as a wages increase for his workers.
“Up to 20,000 jobs will be lost if something is not done about it,” warned the Supermac’s chief.
He added: “This will be a major election issue and whatever party promises to deal with it seriously will get votes.”
Local businessman, Tony Flanagan, speaking from the floor, revealed that he had been on the “receiving end” of a fraudulent claim last year in which the claimant was awarded a whopping €85,000.
“It seems to be kind of accepted that people can continue to make these claims,” said Mr Flanagan who added that the “legal profession hadn’t covered themselves in glory.”
Other speakers at the forum included Tullamore and District Chamber of Commerce members, Philip O’Brien, General Manager of the Tullamore Court Hotel and Anthony Kearns, joint proprietor of Guy Clothing and KODE fashion outlets in the county town.
Fianna Fail’s spokesman on Business, Enterprise and Innovation, Robert Troy outlined the steps his party will take to reform the insurance system if returned to power in the coming General Election.
The Westmeath based Dail Deputy also hit out at the Government and accused them of stalling on reform due to the influence of vested interests.
Philip O’Brien said the “Gardai seemed to be powerless” to deal with fraudulent insurance claims even when they were thrown out of court.
“Insurance companies are paying out claims without a fight,” he alleged.
Continued Mr O’Brien; “We all need the safety and security of insurance but it should not cripple business.”
Anthony Kearns pointed out the key issue was the lack of governance and transparency in the insurance sector.
“Businesses are not being told what money is being paid out,” claimed the Tullamore business man.
Mr Kearns advocated a root and branch reform of the claims process and said there had been false promises on reform over the past number of years.
“We need to know when insurance fraud will be tackled and the Gardai allowed to investigate claims,” he outlined.
“When will the Gardai have the money and resources to investigate fraud,” asked Mr Kearns.
Deputy Robert Troy said Fianna Fail tabled a number of motions in the Dail on insurance reform over the past number of years including calling on the Government to take steps to stop exorbitant increases in insurance premiums.
He said the Government had identified actions which needed to be taken but stressed that not one of these had yet been implemented.
Deputy Troy said that one of these promises had been the creation of a new database to track the level of claims rather than relying on anecdotal evidence.
He added that the central plank of the action plan had been the establishment of a judicial council to set guidelines on fair compensation.
“In my opinion there is a cartel in the insurance industry and they are working together to set prices,” claimed Deputy Troy.
He promised: “We will ensure that the powers are there to tackle uncompetitive practice.”
Deputy Troy added that legislation introduced by Fianna Fail, but not acted on by the Government would ensure that a report on a person found making a fraudulent insurance claim would be sent to the Director of Public Prosecutions.
He also revealed that a Bill introduced by Independent Senator Padraig O Ceidigh would make a statutory offence of perjury.
“The only people not supporting this legislation is the Government,” alleged the Westmeath Deputy.
He said be believed the Government’s reluctance to take action was due to the influence of vested interests.
And he promised that Fianna Fail would introduce a system where legitimate claims were processed in a timely and efficient manner and one which would ensure that community groups and business were not pushed to the pin of their collars on insurance costs.
Mr McDonagh predicted that if a cap was placed on claim pay-outs legal costs would be reduced. This in turn would encourage new companies to enter the insurance market thereby increasing competition and reducing premiums, he added.
Deputy Barry Cowen said that the insurance question will be a major issue in the upcoming general election.
He said there had been ample opportunity to bring in meaningful change over the pat number of years but this had not happened.
Cllr Declan Harvey raised the issue of free legal aid and said this was encouraging people to proceed with exaggerated and false claims.