Shane Ross
Question:211. Deputy Shane Ross asked the Minister for Finance the amount taxpayers have paid into the Insurance Fund since the liquidation of Insurance Corporation of Ireland. [46811/15]
View answerWednesday, 13 January 2016
Questions (211)
Written answers
The Central Bank of Ireland has responsibility under Section 6 of the Insurance Act 1964 to assess the Insurance Compensation Fund (ICF) from time to time to see if it needs financial support. Where it is of the opinion that the state of the ICF is such that financial support should be provided for it, it is allowed to determine an appropriate contribution to be paid to the ICF by each insurer.
This is calculated as a percentage determined by the Central Bank, not exceeding 2 per cent, of the aggregate of the gross premiums paid to the insurer authorised in Ireland or authorised in another EEA Member State in respect of policies issued in respect of risks in Ireland. While they are not required to do so, insurance companies usually pass this charge onto non-life insurance policy holders. Therefore, the amounts paid into the ICF are paid ultimately by non-life policy holders and not all taxpayers per se.
The Insurance Compensation Fund levy has been applied on two occasions, with a total of €442.8m has been collected to date. The first instance was following the collapse of PMPA in 1983 and the collection of this levy ended in 1992. The second followed the placing of Quinn Insurance into administration, with the collection of the levy starting in 2012.
In the case of the insolvency of the Insurance Corporation of Ireland a levy was not applied. ICI, a subsidiary of Allied Irish Bank, collapsed in 1985. No levy was placed on the industry then as compensation to meet the company's liabilities was provided by a combination of AIB funding, commercial loans and State loans which have since been repaid.
The Insurance Act 1964 provides that the Minister for Finance may, on the recommendation of the Central Bank of Ireland, advance monies to the ICF on such terms as to repayment, interest and other matters as may be determined by the Minister, so as to enable payments out of the Fund to be made expeditiously.
In relation to Quinn Insurance in Administration (QIL) I, as the relevant Minister, have since November 2011 advanced a total of €1,012.3m to the ICF, €200m of which has been refunded by QIL. The remaining balance of €812.3m is a loan which is required be repaid to the Exchequer from the ICF over time with interest.