strategy statement03 - 05

administration. These moves reinforce the trend in Ireland towards more effective regulation in the corporate arena.

More effective enforcement of company law is being achieved through improvements in the operation of the Companies Registration Office and the introduction of new structures to enforce company law, in particular the establishment of the Office of the Director of Corporate Enforcement (ODCE).

Improvements are also being sought through the enactment of clearer, simpler and more up to date legislation to regulate the activities of companies and their officers, notably through the work of the statutorily established Company Law Review Group and the forthcoming Company Law Consolidation Bill which is planned for publication in 2003. The establishment of Irish Auditing and Accounting Supervisory Authority (IAASA) during the course of 2003 will ensure a more pro-active and better resourced oversight of the accounting and auditing profession.

In recent years there has been an evident convergence of financial services provision, whether in the form of common ownership of providers or in the form of production of almost identical products by various providers. The danger of unintended regulatory gaps or of regulatory arbitrage has grown. In addition, the provision of financial services has become very much more sophisticated, thanks to the developing role of information technology in designing products, managing providers’ risks and even in selling to the consumer. For all of these reasons, the Government has decided to establish the Irish Financial Services Regulatory Authority (IFSRA) which has brought together regulators based in the Central Bank, the Department’s Insurance Division, the Office of the Director of Consumer Affairs and the Registrar of Friendly Societies. IFSRA commenced operations in May 2003.

1.15.3Insurance

Substantial and escalating increases in insurance premia and refusals to quote by insurers have serious repercussions for many businesses, community organisations and individuals, and for the economy in general. Smaller companies are being particularly badly hit by premium increases, and business representative organisations have pointed to jobs being put at risk.

Against this backdrop, the insurance industry has highlighted international and domestic difficulties. In the domestic context, specific causes put forward include the high level of claims and awards, legal costs and the method for determining them, along with failure to prosecute fraudulent claims.

The Single Market is not yet delivering financial services (including insurance) to consumers across borders in the EU. With the combination of escalating insurance costs and contraction in the number of competitors offering insurance in Ireland, there is a burgeoning interest in securing insurance from companies authorised in other EU Member States. However, attempts to place insurance with other EU providers have not in the main been successful. EU law prevents governments from intervening in relation to premium levels or the risks that insurers are prepared to underwrite.

Tackling the issues underlying the cost and availability of insurance, insofar as action can be taken at national level, is a political priority and a comprehensive set of measures is contained in the Agreed Programme for Government. These measures aim to improve the functioning of the insurance market and the system itself. They constitute an operational reform programme, impacting on a number of Government Departments and other bodies including IFSRA and relevant representative organisations.

The measures range from improvements in road safety, the legal process and consumer information, to providing a balance between prudential supervision and consumer protection. They are interrelated and, when taken together, they have the potential to impact favourably on cost.