The Insurance Compensation Fund (ICF) levy being applied to home, motor and commercial insurance, and which came into effect from 1 January 2012, operates under the Insurance Act 1964. Its purpose is to protect policy holders in the event of their insurer becoming insolvent.
In 2010 Joint Administrators were appointed by the High Court at the request of the Central Bank because of concerns about the solvency position of Quinn Insurance Limited (QIL). The funds from the levy have been used to allow the QIL administrators to meet their financial obligations as they arise and the QIL administrators must seek High Court approval before any funds can be withdrawn from the ICF.
Under Section 6 of the Insurance Act 1964 the responsibility for deciding whether the ICF has sufficient funds available to it at any particular time is a matter for the Central Bank. Where, in the Bank's opinion, the state of the Fund is such that financial support should be provided for it, it determines an appropriate contribution to be paid to it by each insurer calculated as a percentage, not exceeding 2% of the aggregate of the gross premiums paid to that insurer in respect of policies issued in respect of risks in the State.
Since the reintroduction of the ICF levy in January 2012 there has been a total of €111,340,294.95 collected. €111,279,324.58 of this has been transferred from the Revenue to the ICF with a small amount deducted by the Revenue Commissioners to cover the set up and annual administration costs of collecting the levy.
The Central Bank and they have informed me that, it is not anticipated that there will be a change in the levy of 2% in the short to medium term.
