The Gazette 1987

JU LY/AUGUST

1987

GAZETTE

to play a prominent part in dealing with claims brought under the Accident Compensation Act. The Accident Compensation Corporation did not seek to render irrelevant private insurance institu- tions. The scope of the Act is not universal and private insurance cor- porations continue to function and indeed profit within the areas out- side the ambit of the Corporation. Claimants under the Accident Compensation Scheme may also hold additional cover and are entitl- ed to avail of traditional remedies under that cover notwithstanding their entitlement to compensation from the Corporation. Perhaps the most ingenious aspect of the scheme is the con- cept of a limited lump sum in com- pensation for permanent injury similar to that laid down by our own civil liability act in fatal injury cases, coupled with a tax free "dependency income" into the future. 6 The "dependency in- come" was in effect hidden in- come for all revenue purposes. It was therefore to a dependant's ad- vantage to obtain further employ- ment at the earliest possible date notwithstanding his/her actual loss. This of itself has created a conducive atmosphere for rehabilitation. This has also preserved the Corporation from the requirement to discharge actuar- ially based lump sums of far greater proportions. It is thus able to invest the saved money taken in by way of premium income and derive benefit itself. In stark contrast to the secretiveness of our own insurance industry the New Zealand authorities have shown great open- ness in their syystem. Under sec- tion 117 of the Acc i dent Compensation Act of 1982, (an amending and consolidating further enactment), the Corporation must present a fully audited report to the New Zealand House of Represen- tatives annually, setting out in- come and disbursements and generally accounting to Parliament for its activities during the previous financial year. Finally it should be noted that the basis for underwriting claims brought against the Accident Com- pensation Corporation is national and not international. This means that the volatility of the industry in other countries does not affect it.

This preserves subscribers to the scheme from sudden rises in premium from which we suffer from time to time when certain in- surance companies experience underwriting difficulties outside this jurisdiction. In conclusion I should say that the New Zealand Authorities have showed great pride in their system. They are satisfied as to its benefits and are anxious that others learn from it and follow their example. I fully concur with this view. There is no doubt but that the in- itially high premium cost of motor insurance has contributed to the high proportion of uninsured drivers within this jurisdiction, which has in turn led to higher premiums through pressure on the MIBI. In this respect the insurance industry has been reactive rather than in- novative. The same may be said of successive Irish Governments. For political and professional self in- terest reasons they have not wish- ed to " r ock the boa t ". The situation which we have inherited from their inactivity now however calls for radical re-thought. Within the infrastructure of an organisa- tion such as the PMPA (presently under Government control), we have the basis for an entity which might become an equivalent to the New Zealand Accident Compensa- tion Corporation. At this point in time the Government is in a unique position to take control of what can only be described to date as a deteriorating situation and, when considering the New Zealand ex- ample. 3 bark in a similar if radical direction which would lead in the medium and long term to the far reaching benefit of all the parties concerned. 1. Accident Compensation Coverage. J. L. Fahy. Ch. 1 at page 8. 2. Accident Compensation Act 1982. S. 78. 3. Accident Compensation Act 1982. S. 65 (2). 4. Report of the Accident Compensation Corporation for year ended 31 st March 1985 at pp. 16/17. 5. Report of the Accident Compensation Corporation for year ended 31st March 1985 at pp. 16/77. 6. Accident Compensation Coverage. J. L. Fahy. Ch. 20 at page 67. FOOTNOTES:

GENERAL REFERENCES: Compensation for Incapacity.

Geoffrey Palmer. Committee of Enquiry into the Insurance Industry Interim Report on Motor Insurance 25th November, 1972. John O'Connor, (Chairman). Motor Premiums Advisory Committee In- terim Report on Motor Insurance Premiums, 5th April, 1974. W. A. Honahan (Chairman).

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