Pearse Doherty
Question:301. Deputy Pearse Doherty asked the Minister for Finance if he will lay before the House, the latest accounts and projections of the Insurance Compensation Fund. [38520/12]
View answerTuesday, 18 September 2012
Questions (301)
Written answers
Under Section 2(8) (b) of the 1964 Insurance Act, I am required to publish the annual accounts of the Insurance Compensation Fund. Up until this year, the Central Bank has published them on my behalf as part of its statistical review of the insurance industry. For 2011, I am proposing shortly to publish the accounts on my Department's website. I will also lay them before the Houses of the Oireachtas. The accounts outline amongst other things the amounts owing the ICF by all the companies under administration, i.e. Icarom plc (under administration), Primor plc (under administration) and Quinn Insurance Ltd (under administration). It is expected that the ICF will not have to advance any more funds to Primor, and the only funds that it will have to advance to Icarom relates to the last tranche of money due from AIB under the 20 year agreement negotiated in 1992 whereby they agreed to pay just over 11m euro a year to the Administrator.
With regard to Quinn Insurance Ltd (QIL) to date 786 million euro has been paid out of the fund to the QIL Joint Administrators of which 730m euro has been advanced by the State. The balance of 56m euro is made up of 40m euro in the fund at the time the call was first made and 16m euro from the first quarter 2012 ICF levy.
In relation to future calls upon the ICF the Deputy is aware that the Joint Administrators indicated to the High Court that they may have to seek up to 1.65bn euro from the Insurance Compensation Fund in order to fully discharge their administration obligations. It should be noted that they have qualified this by saying that for accounting reasons the projected call upon the fund now includes considerable contingencies that it is hoped will not be called upon. Consequently they believe that if they were to remove most of these accounting adjustments and use a "best estimate" calculation, then the call on the fund is likely to be in the range of 1.1bn-euro1.3bn euro rather than the 1.65bn euro for which they have provided.
What this means for future projections of the ICF is that there is likely to be a requirement for the State to advance further significant sums to the ICF in 2013 to meet the cost of the Quinn administration, and perhaps lesser amounts in 2014 because of the front loaded nature of QIL's liability profile and as the ICF levy is only likely to generate in the region of 65m euro to 75m euro a year. The Central Bank is responsible for managing the financial well-being of the Fund and the exact amount to be advanced will be determined taking account of the recommendation I receive from it under Section 5 of the 1964 Insurance Act. Finally, the Deputy should note that the QIL Joint Administrators have to seek High Court approval for their drawdowns from the ICF and monies are lodged by me to the fund only as a need for a drawdown arises.