The Gazette 1987

GAZETTE

LY/AUGUST

1987

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.

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.

FOOTNOTES:

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.

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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