Dáil Éireann debate -
Wednesday, 9 Feb 2000

Vol. 514 No. 1

Written Answers. - Insurance Companies.

Breeda Moynihan-Cronin

Question:

80 Mrs. B. Moynihan-Cronin asked the Tánaiste and Minister for Enterprise, Trade and Employment the specific steps, if any, she is taking to ensure that only reputable re-insurance companies can operate in Ireland in view of the announcement of 29 December 1999; her views on whether disreputable re-insurance companies have been operating within the State; and if she will make a statement on the matter. [3505/00]

Minister of State, at the Department of Enterprise, Trade and Employment (Mr. Treacy)

The great majority of the some 140 reinsurance companies, which are registered in Ireland are either subsidiaries of major international reinsurance groups, or ‘captive' reinsurers of multinational companies. All these companies, which are based in the IFSC, have been carefully vetted, before being granted IFSC tax status, and contribute positively to Ireland's international reputation, as a high quality financial services centre.

One reinsurance company, not based in the IFSC, has been the subject of unfavourable reports for some time, including reports, in the Irish media. We are also aware of a number of IRNR companies registered as reinsurance brokers, whose activities have also given rise to concern. As far as we are aware, the companies concerned operate exclusively outside of Ireland.

We have taken the following steps to address any damage to Ireland's reputation which could be caused by such companies These are in addition to the company law measures which have been taken to address the general IRNR issue: regulations under the Insurance Act, which came into effect at the end of December 1999, prescribe a detailed form of notification, which must be completed by new reinsurance companies; the arrangement whereby the Companies Registration Office will not register a new reinsurance company until it has been vetted by our Department's insurance division has been reinforced; the new insurance Bill, which is currently before the Dáil, provides that the information in reinsurance notifications, must be updated annually. It brings reinsurance brokers, within the new statutory system of supervision of insurance intermediaries. It also makes provision for the possible introduction, at a future date, of a statutory system of authorisation and supervision of reinsurance companies on the lines of the system that currently applies to insurance companies.

The new measures have been introduced following extensive consultation with the insurance industry and with others concerned to protect Ireland's reputation as an international financial services centre. We are satisfied that the package of measures described above strikes the right balance between protecting Ireland's international reputation and avoiding the imposition of excessive regulatory requirements on industry.