The Tánaiste was yesterday urged to seek a firm commitment from insurance companies that premiums will be reduced under legislation dealing with personal injuries claims.
The Fine Gael spokesman on enterprise, trade and employment, Mr Phil Hogan, said he had no doubt about Ms Harney's sincerity in her objective to tackle high insurance costs.
"However, I do believe that the measures she is taking will not be effective, primarily because she is placing far too much reliance on insurance companies to behave reasonably and to respond positively to her initiatives.
"In all the measures she has adopted to address the insurance crisis, she has not sought any bankable guarantees or meaningful commitments from insurance companies that they will pass on reduced premiums.
"The Tánaiste seems prepared to believe insurers at their word and expects them to respond reasonably and fulsomely to the reforms she is initiating."
Mr Hogan was speaking during the second-stage debate on the Personal Injuries Assessment Board Bill.
Introducing the Bill, the Minister for Labour Affairs, Mr Fahey, said its primary purpose was to establish the Personal Injuries Assessment Board (PIAB) as a statutory body. The board would be charged with making assessments without the need for legal proceedings, of compensation for personal injuries, he added.
"The role of the PIAB will be confined to claims where legal issues are not disputed by the respondent. PIAB will commence operations early in 2004 with employers' liability claims, before encompassing public liability and motor accidents in mid-2004."
Mr Fahey said it was widely accepted that litigation costs added, on average, more than 40 per cent to the cost of compensation. "This has contributed to the high cost of insurance and to the cost of claims against the growing self-insured sector, including the State itself," he said.
"These costs are a threat to the health of the Irish economy, to job security and to our competitiveness in an enlarged European market," he added
Mr Hogan said: "The Tánaiste seems to forget that insurance companies do not operate to any public service agenda, but rather, like most commercial organisations, are focused on issues of profit and shareholder return."
Given the scale of the problem, Mr Hogan added, he found it incomprehensible that the Tánaiste had failed to secure clear and unequivocal commitments from companies that the establishment and operation of PIAB would result in lower premiums for consumers and businesses. "I can see the scene being set already for insurers to argue that the establishment of PIAB will not result in lower insurance costs," he said.
Mr Hogan said the chief executive of one of the major insurers had recently told the Oireachtas Committee on Enterprise and Small Business that he would not commit to making reductions in premiums as a consequence of the establishment of PIAB.
"I find this statement hard to accept. Surely insurance companies, which are aware of the patterns of claims and settlements, must be in a position to estimate the extent of their savings as a consequence of PIAB.
"It is frankly bizarre that leading insurers, with supposedly excellent sources of management information, cannot predict the savings that will result if PIAB operates effectively. This does raise a concern about insurers' attitudes and actions regarding PIAB."
The Labour spokesman, Mr Brendan Howlin, said those who had recourse to the PIAB must do so in the confidence that they would be treated fairly and their award would be proper and appropriate.
"Justice must be seen to be done from the outset," he said. "I have had discussions with a vast array of interested parties. Few Bills have generated as much lobbying of members because there are many vested interests, some of whom will be adversely affected. However, while people may have a vested interest, that does not mean what they say should be discarded."
