Dáil Éireann debate -
Thursday, 15 Feb 1990

Vol. 395 No. 8

Written Answers. - Insurance Corporation of Ireland.

Tomás MacGiolla

Question:

27 Tomás Mac Giolla asked the Minister for Industry and Commerce if he has received a report from the Administrator of the Insurance Corporation of Ireland, regarding the possible sale of ICI; if he will outline the Government's plans for the future of the company; and if he will make a statement on the matter.

Minister for Industry and Commerce (Mr. O'Malley)

As I announced on 13 February 1990, the Government have agreed to the proposal of the administrator of the Insurance Corporation of Ireland, Mr. William McCann, to seek the approval of the High Court for the sale of the Irish business of the company to Assurances Generales de France. The administrator proposes to see the Irish business to AGF for a total consideration of £107 million.

This sale represents the culmination of a sustained effort by the administrator, with the support of the management and staff of the company, to return the business to normal operation. I am particularly pleased because the return of the business to normal trading in a properly capitalised company represents the best outcome for the future of the company and its staff and for the insurance market generally.

Assurances Generale de France is one of Europe's largest insurance companies with consolidated premium income of 32.8 billion francs (£3.64 billion at today's exchange rate) and consolidated net profits of 2.1 billion francs (£233 million) in 1988. AGF has a long-standing relationship with Irish Life through its shareholding in Church and General and I am informed that there is an understanding between the two companies whereby Irish Life may take a minority participation after the purchase is completed.

The sale of the ongoing business of ICI represents a significant landmark on the road to the successful completion of the administration of the company. The runoff of the remaining, pre-administration liabilities will remain the responsibility of the administrator. To enable the sale to proceed the Government have agreed to provide the necessary assurances to the High Court and the purchaser regarding future liabilities. While the purchase consideration together with the funding already made available should meet the bulk of outstanding claims, it is not possible to say definitively if, or to what extent, further funding might arise. However, the Government do not intend that any net funding will fall to be met by the general taxpayer or by insurance policyholders.