Vol. 541 No. 5
102 Mr. Deasy asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will give details of the rescue funds which were set up to cater for the financial fall-out in the aftermath of the collapse of insurance companies such as PMPA and ICI; and if she will consider using the moneys in this fund to assist businesses which have been affected by the collapse of the Independent Insurance Company. [23292/01]
The insurance compensation fund levy was introduced on 1 January 1984 following the collapse of PMPA in 1983.
Levies were paid by all non-life insurers at a rate of 2% of gross premium income until 31 December 1991. The rate was reduced to 1% from 1 January 1992 to 31 December 1992. Some £148 million was collected by way of the levy, which is used to finance the administration of Primor plc. The administrator is continuing to run off claims incurred prior to that date under the name Primor plc. Approximately £18 million remains in the fund.
The levy ceased to apply from 1 January 1993 as it was felt that sufficient funds had been collected to enable the successful completion of the administration.
The insurance compensation fund also received an advance of £100 million in 1985 from the Exchequer for the administration of Icarom plc following the failure of ICI. The advance involved funding arrangements from the banking sector.
The insurance compensation fund is under the control of the High Court. It may be drawn down only in the event of a liquidation of an Irish authorised non-life insurance company. Under current legislation, therefore, the fund cannot be used in the case of Independent Insurance.
103 Mr. Cosgrave asked the Tánaiste and Minister for Enterprise, Trade and Employment the arrangements in place to protect businesses placed at risk by the collapse of an insurance company. [23236/01]
I assume the Deputy is referring to the collapse of Independent Insurance Company Limited.
Independent Insurance Company Limited is a UK authorised insurer. Accordingly, the UK authorities are responsible for the financial supervision of the company.
The position is that the company is in liquidation and the liquidation process will be dealt with under UK law. The company is under investigation by the serious fraud office in the UK.
Officials of our Department have met officials in the UK treasury department and the Financial Services Authority. They stressed our concerns in relation to Irish policyholders with Independent Insurance Company Limited. The UK authorities have undertaken to examine the application of the existing law governing the UK policyholders protection fund, to Irish policyholders.
While I appreciate the difficulties being faced by policyholders and am very concerned that any company would face closure because of the failure of Independent Insurance Company, it would not be acceptable to burden taxpayers with the inevitable cost that would be involved in meeting insurance claims, resulting from the failure of this UK company.
