Tuesday, 10 June 2014

Questions (193)

Michael McGrath

Question:

193. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the loans that the State has made to the insurance compensation fund in each year since 2010; the expected date of recovery of these loans; and if he will make a statement on the matter. [24692/14]

View answer

Written answers (Question to Finance)

The Insurance Compensation Fund (ICF) allows administrators to apply to the High Court for funding where necessary in order to enable meet their financial obligations as they arise. The ICF is funded by industry through a levy. However, because it is not pre-funded, there is a provision in the 1964 Insurance Act which allows the Minister for Finance to provide the necessary monies in the form of a repayable loan where there are insufficient funds available. 

Since the appointment of Joint administrators to Quinn Insurance Limited (QIL) in 2010, a total of €933.3m has been advanced to the ICF.

Amounts drawn down by ICF from the Exchequer

Date of Payment

Loans from the State to the Fund

 

€m

Total 2010

0

Total 2011

280

Total 2012

455.5

Total 2013

197.8

Total Payment

933.3

It is difficult to know with certainty how long it will take to fully recover the money.  A major factor in the speed of recovery will be how much gross premiums relating to insured risk in the State increase during this time.  The higher the level of gross premiums to which the 2% levy is applied, the quicker the Exchequer will be repaid.

Under the current estimates it is expected however, that the ICF will be in a position to begin repaying the Exchequer in late 2015.  This will continue until the Exchequer advance has been repaid.  It should be noted that a commercial rate of interest of 250bp over the 6 month Euribor rate applies to the Exchequer advances.