Written Answers Nos. 241-265
241. Deputy Pearse Doherty asked the Minister for Finance if, with regard to the correspondence supplied, he and the Central Bank believe a person (details supplied) has been treated fairly by the company; the legal avenues open to customers in such cases; and if he will make a statement on the matter. [12739/16]
View answerFirstly, it should be noted that the Central Bank of Ireland has the responsibility for day-to-day regulatory issues, and is statutorily independent in the exercise of these functions.
My officials have consulted with the Central Bank who have advised that the type of plan in question is designed to provide consumers with life cover for their whole life. From the information provided, it would appear that this individual policy does not pay a lump sum on the death of the policy holder.
As long as the policy holder makes regular payments and the payments are sufficient to maintain the chosen benefits, this type of cover will pay out a lump sum in event of critical illness or permanent disability. The regular payment into the plan covers the cost of providing the benefits chosen on the plan. In the early years, the payments are higher than the cost of the policy holder's benefits. The extra money paid goes into the plan fund. Protection benefits get more expensive as policy holders get older; usually as the plan progresses the payments begin to equal the cost of the chosen benefits. In the later years of reviewable protection plans, the cost of the benefits increases significantly. In order to keep the level of benefits at the current level of payments, the difference is made up from the plan fund.
The insurance company carries out regular reviews (the period in which these are completed can be 5 years, 6 years, 10 or 12 years depending on the product) to see if the consumer's regular payment plus any fund that has been built up is enough to cover their chosen benefits for their reviewable protection plan. During a policy review the insurance company may find that the consumer's current level of payments is enough to maintain the level of cover that the consumer wants. The insurance company may also find that the current level of payments is not enough to maintain the level of cover desired by the consumer.
The possible next step for the policyholder to follow is subject to the Consumer Protection Code. The Central Bank's Consumer Protection Code requires firms to act honestly, fairly and professionally in the best interest of consumers, to act with due care and diligence, and it prohibits firms from misleading customer. Firms must make full disclosure of all relevant material information in a way that seeks to inform the customer.
Under the Consumer Protection Code, a consumer must first complain to the regulated entity. If after 40 days the complaint has not been resolved, the customer may refer their complaint to the Financial Services Ombudsman. The consumer in this case should be advised to refer her complaint to the Financial Services Ombudsman (telephone 01 6620899) if she remains unhappy after proceeding through the firm's complaints handling process.
242. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank is aware that an insurance company (details supplied) has written to at least one customer demanding a significant increase in premium because of a historical mistake made by the company; if it will investigate whether this company has sent similar letters to other customers; and if he will make a statement on the matter. [12740/16]
View answerFirstly, it should be noted that the Central Bank of Ireland has the responsibility for day to day regulatory issues, and is statutorily independent in the exercise of these functions.
While the Bank is prevented from discussing individual regulated firms, it has advised that the regular payment into the plan in question covers the cost of providing the benefits chosen on the plan. In the early years the payments are higher than the cost of the policy holder's benefits. The extra money paid goes into the plan fund. Protection benefits get more expensive as policy holders get older; usually as the plan progresses the payments begin to equal the cost of the chosen benefits. In the later years of reviewable protection plans, the cost of the benefits increases significantly. In order to keep the level of benefits at the current level of payments, the difference is made up from the plan fund.
The insurance company carries out regular reviews (the period in which these are completed can be 5 years, 6 years, 10 or 12 years depending on the product) to see if the consumers regular payment plus any fund that has been built up is enough to cover their chosen benefits for their reviewable protection plan. During a policy review the insurance company may find that the consumer's current level of payments is enough to maintain the level of cover that the consumer wants. The insurance company may also find that the current level of payments is not enough to maintain the level of cover desired by the consumer.
The Central Bank also noted that under it's Consumer Protection Code, firms are required to act honestly fairly and professionally in the best interest of consumers, to act with due care and diligence, and it prohibits firms from misleading customer. Firms must make full disclosure of all relevant material information in a way that seeks to inform the customer.
243. Deputy Thomas Byrne asked the Minister for Finance the position regarding the availability of agricultural relief from capital acquisitions tax where the farming land, the subject of the relief, is wholly or partially the subject of an unexercised option in favour of a wind turbine developer or the subject of a burden in the Land Registry prohibiting any alienation or transfer of the landholding without the consent of a wind turbine developer; and if he will make a statement on the matter. [12766/16]
View answerI am advised by the Revenue Commissioners that gifts and inheritances of agricultural property, including land, qualify for relief (known as 'agricultural relief') from the payment of Capital Acquisitions Tax (CAT) once certain conditions are satisfied. Section 89 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for 'agricultural relief'. The relief takes the form of a 90% reduction in the taxable market value of the gifted or inherited agricultural property.
The person taking the gift or inheritance (the 'beneficiary') of the agricultural property must qualify as a 'farmer' for the purpose of section 89 CATCA 2003. This means that a beneficiary's agricultural property must comprise at least 80% by gross market value of the beneficiary's total property at a particular date. The Revenue Commissioners take the view that land on which a wind turbine is installed is not agricultural property for the purpose of establishing whether or not a beneficiary satisfies this '80%' test. Thus, depending on the amount of an individual's land that is actually occupied by wind turbines (and not merely subject to an option over the land), the use of agricultural land for wind turbines may result in a beneficiary's failure to satisfy the '80%' test and to qualify for agricultural relief.
A condition for agricultural relief that applies in relation to gifts and inheritances taken on or after 1 January 2015 is that a beneficiary, or a lessee where the beneficiary leases the agricultural land, must actually farm the land for a period of at least 6 years after taking the gift or inheritance. It is unlikely that the ability to farm the land would be affected by the granting of an option over the land to a wind turbine developer or the registration of a burden over the land with the Land Registry. However, the ability to farm the land would be affected where the option is exercised by the wind turbine developer and a wind turbine is actually installed. As it would not generally be possible to farm any part of the land occupied by wind turbines, the change in the use of land from farming to the generation of energy within the required 6-year period would result in a withdrawal of some, or all, of any agricultural relief that had been granted, depending on how much of the land is diverted to this alternative use.
244. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 160 of 6 April 2016, if the circa 11% figure given for a bank (details supplied) is a figure for the amount of new mortgage loans that are counted as exceptions under the Central Bank's loan-to-value rules or if they are the figure for exemptions, switchers, negative equity and so on; and if he will make a statement on the matter. [12801/16]
View answerI have been informed by the lender referred to in your question that the 11% quoted represents the amount of new mortgage loans that are considered as exceptions under the Central Bank of Ireland's macro prudential rules and does not include any exemptions for, for example, switchers or negative equity customers.
The Deputy may also be aware that, in relation to the review of the macro prudential measurers for residential mortgage lending, the Central Bank has informed me this will take place later this year with publication expected in November.
The Central Bank has indicated that, while the general framework of mortgage rules is intended to be a permanent feature, arising from this forthcoming review the calibration of these rules can be tightened, loosened or left unchanged in response to its analysis of the operation of these rules from inception through summer 2016. However, it has cautioned that, given the value of a stable rules-based system, any changes to the existing measures will require a high evidence threshold.
As part of the review process, the Central Bank has indicated that it will invite written public submissions that provide evidence-based analyses of the impact of the rules and that details on this process will be provided in advance of the submission period.
The macro prudential regulations were put in place under the provisions of section 48 of the Central Bank (Supervision and Enforcement) Act 2013 and that Act requires the Central Bank to formally consult with me, as Minister for Finance, on any new regulation it proposes to put in place under that section including in relation to the mortgage lending macro prudential measures.
245. Deputy Eoin Ó Broin asked the Minister for Finance the amount of money spent by his Department on media advertising from March 2011 to February 2016, showing the media organisation, newspaper, radio, television or any other forms of media to which advertisement fees were paid by his Department; and the amount of money paid per year to each individual media organisation in tabular form. [12886/16]
View answerThe information requested by the Deputy in relation to the amount of money spent by my Department on media advertising fees from March 2011 to February 2016 is set out in the following table.
|
Year |
Media organisation |
Purpose of advertisement |
Cost (€) |
Annual total to media organisation |
Annual Department total (€) |
|
2011 |
Brindley Advertising |
Appointments of Board of Directors of Banks in Irish Times, Independent and Examiner |
4,880.38 |
|
|
|
Brindley Advertising |
Notices re Anglo, INBS and Credit Institutions Stabilisation Act as required by EU Directive in UK and 28 EEA-wide countries' media Brindley |
280,478.61 |
|||
|
Brindley Advertising |
Notices on Subordinated Liabilities Order and Invitation for Submissions in relation to Bank of Ireland in Irish Independent, Irish Times, Financial Times and Daily Telegraph |
91,175.85 |
376,534.84 |
||
|
376,534.84 |
|||||
|
2012 |
Public Appointments Service |
Recruitment of Chief Economist, Head of Banking Policy and Secretary General of the Department of Finance in the Sunday Times, Sunday Business Post, Irish Times and Financial Times |
33,167.68 |
33,167.68 |
|
|
Brindley Advertising |
Notices/Advertisements re Anglo, INBS and Credit Institutions Stabilisation Act as required by EU Directive in Irish media (Irish Times and Irish Examiner) |
14,255.06 |
14,255.06 |
|
|
|
47,422.74 |
|||||
|
2013 |
Public Appointments Service |
Recruitment of Chief Finance and Operations Officer in Sunday Times, Sunday Business Post, ACCA and ACA e-zine |
5,205.95 |
|
|
|
Public Appointments Service |
Recruitment for position of Economist in the Irish Times |
3,795.68 |
9,001.63 |
|
|
|
Brindley Advertising |
Notices of the Official Languages Act and Scheme in Foinse |
687.42 |
687.42 |
|
|
|
|
|
|
|
|
9,689.05 |
|
2014 |
Public Appointments Service |
Recruitment for the position of Head of International & EU Division in the Sunday Business Post and Sunday Times online |
2,787.41 |
2,787.41 |
|
|
Mediavest |
Notice re winding up of SAT/ICAROM (Insurance Corporation of Ireland) in Irish Daily Mail |
130.18 |
130.18 |
|
|
|
ICAN Ltd |
Creative strategy, production and burst 1 of campaign to increase awareness of the Supporting SME online tool on social media |
27,683.70 |
27,683.70 |
||
|
|
|
|
|
|
30,601.29 |
|
2015 |
Financial Times |
Advertisement for the position of Governor of the Central Bank |
12,300.00 |
12,300.00 |
|
|
Mediavest |
Local Property Tax Review advertisements in Irish Times, Irish Independent and Irish Examiner |
7,181.56 |
7,181.56 |
||
|
ICAN Ltd |
Campaign to increase awareness of the Supporting SME online tool on social media |
50,519.18 |
50,519.18 |
||
|
|
|
|
|
|
70,000.74 |
The Department also uses Iris Oifigiúil for the mandatory publication of Statutory Instruments, Ministerial Directions, the Exchequer Statement, etc. Entries are also placed in phone books.
246. Deputy Maurice Quinlivan asked the Minister for Finance regarding his assertion that we do not meet the criteria for applying, particularly in light of the economic cycle and other factors, for greater flexibility at European level on EU fiscal rules to support long-term investment programmes, with social housing being a top priority, if he will define our ineligibility in light of the economic cycle and other factors. [12902/16]
View answerThere are two sources of flexibility within the EU rules designed to encourage Member States to undertake public investment. Firstly, within the expenditure benchmark pillar of the fiscal rules investment in capital formation is granted favourable treatment. Within the rules spending on capital formation is smoothed over four years with the result that only one quarter of the increase in investment for capital formation purposes must be funded in the first year from within the fiscal space available under the expenditure benchmark. This provision demonstrates that the rules are designed to actively promote public investment and capital spending.
As I have stated previously, the loosening of the medium term budgetary objective (MTO) to which Ireland is subject results in an additional €1.5 billion in fiscal space becoming available once the MTO is achieved. Taking account of this, together with the benefit of the capital smoothing treatment explained above, the Programme for Government includes a commitment to deliver an additional cumulative €4 billion in capital spending. We are also leveraging additional funding to invest in the development and construction of housing. The joint venture fund Activate Capital established by Ireland's Strategic Investment Fund (ISIF) is a strong example of such a commitment.
The second source of flexibility - and that to which the Deputy refers - is the 'investment clause' provision within the Stability and Growth Pact. Subject to meeting certain eligibility criteria temporary leniency may be granted with regard to the required pace of structural budgetary adjustment. The purpose of this is to promote greater spending on investment projects. Where it can be shown that projects generate increased levels of investment with a major net positive impact on the growth potential of the economy and on the sustainability of the public finances, the need for budgetary adjustment may be temporarily deferred by up to 0.5% of GDP in one year.
However, the eligibility conditions necessary to invoke this clause are restrictive, requiring the presence of negative real GDP growth or the existence of a negative output gap of at least 1.5 per cent. On the basis of my Department's current macro-economic outlook, as published in the 2016 Stability Programme Update on 27 April, this condition alone excludes Ireland from applying for the clause at present and for the foreseeable future.
247. Deputy Michael McGrath asked the Minister for Finance the current regulatory framework for receivers appointed by banks; if he plans to introduce any changes in this area; the oversight in place with regard to the level of fees charged by receivers; the recourse an affected borrower has who believes the fees charged in respect of their assets are excessive and unjustifiable; and if he will make a statement on the matter. [12957/16]
View answerI understand that the appointment of a receiver can be done under company law or land and conveyancing law.
The Companies Act 2014 includes detailed provisions which regulate the appointment and the powers of receivers, examiners and liquidators and is the responsibility of my colleague the Minister for Jobs, Enterprise and Innovation.
While the 2014 Act does not specify any regulatory standards for the appointment of a receiver, I understand that the Company Law Review Group which advises the Minister for Jobs, Enterprise and Innovation on the review and development of company law, is currently examining whether it is desirable or necessary to further amend company law in this area.
The Land and Conveyancing Law Reform Act 2009, which is the responsibility of my colleague the Minister for Justice and Equality, includes provisions around fees and the prescribed rates for receivers.
248. Deputy Michael McGrath asked the Minister for Finance if he is aware that the Irish Bank Resolution Corporation, in special liquidation, is no longer in a position to provide legacy account support or assistance for loan accounts, mortgage accounts or deposit accounts, including the printing of copy statements or loan offer letters, due to the wind-down of the IBRC; if he will acknowledge that this may cause serious difficulties for borrowers; and if he will make a statement on the matter. [13151/16]
View answerAs a result of the special liquidation and continued wind-down of the bank, IBRC (in special liquidation) is no longer in a position to provide copy statements to former customers, this is due to the decommissioning of legacy banking systems as the bank is being wound-down.
The Special Liquidators have confirmed that they continue to provide statements on any remaining customers loan accounts in the bank.
Prior to the special liquidation of the bank, customers should have received original statements on their accounts at least annually. Customers should also have been provided with copies of original Facility Letters when they took out their loans.
Post sale of loans to third parties, the Special Liquidators provided details of historic transactions to the service providers of the purchasers of these loans. Customers have been given the contact details of their new service provider and therefore should contact them if they should need a copy statement or to confirm the balance on their account.
249. Deputy Pearse Doherty asked the Minister for Finance to expand on the programme for Government commitment to introduce a help-to-buy scheme or mortgage insurance scheme; and if he will make a statement on the matter. [13210/16]
View answer250. Deputy Pearse Doherty asked the Minister for Finance if the proposed help-to-buy scheme or mortgage insurance scheme will be a State-backed scheme or draw upon private insurers or investors; and if he will make a statement on the matter. [13211/16]
View answerI propose to take Questions Nos. 249 and 250 together.
Primary responsibility for the broad scope of housing policy is a matter for my colleague Simon Coveney TD, Minister for Housing, Planning and Local Government. He is developing an Action Plan for Housing and, having regard to the number of Departments and agencies which will have an involvement in that plan, its formulation and implementation will be overseen by An Taoiseach and the new Government Committee on Housing.
As indicated in the Programme for a Partnership Government (PfPG), this Action Plan will be a collaborative process and will draw on the work of the Oireachtas Committee on Housing and Homelessness as well as the actions laid out in the PfPG itself. It is recognised in the PfPG that some first time buyers may face difficulties in accessing mortgage finance to purchase a house and to that end the PfPG, as one of the range of measures in the area of housing, commits the Government to work with the Central Bank, as part of its up-coming review of its mortgage lending limits, to develop a new "Help to Buy" scheme to ensure availability of adequate, affordable mortgage finance or mortgage insurance for first time buyers as new housing output comes on-stream.
Both the Oireachtas Joint Committee on Finance, Public Expenditure and Reform (during the term of the previous Dáil) and the Central Bank of Ireland (in its 2014 consultation process on the then proposed macro prudential measures for residential mortgage lending) considered the issue of mortgage insurance in an Irish context. However, the Central Bank, which is independent in the formulation of macro prudential policy, ultimately concluded that it did not consider that an exemption from the loan to value (LTV) macro prudential measures for insured mortgages to be an effective practical measure at that time. Instead, the Bank concluded that the issue of access to mortgage finance by credit worthy first time buyers (FTBs) was better addressed by the introduction of a higher LTV cap for lower valued properties. Accordingly, the Central Bank ultimately provided for a 90% LTV threshold for FTBs in respect of the value of a property up to €220,000 and this is higher than the 80% LTV threshold which applies to all other primary home mortgage lending (and to the 70% LTV threshold which applies to buy to let residential mortgages). Of course, these are proportionate thresholds and individual banks have a certain flexibility to provide a limited amount of lending at higher LTV thresholds subject to also meeting consumer protection requirements and having satisfying themselves that the consumer borrower is likely to be in a position to meet the obligations of the credit agreement.
As the Deputy is aware, the Central Bank will carry out a review of the current macro prudential rules later this year with publication expected in November. To that end, the Bank has indicated that the existing rules can be recalibrated if the evidence suggests that such an adjustment would be warranted.
However, an overriding primary policy objective in the area of housing is to deliver affordable and sustainable housing and credit markets over the course of the economic cycle and to avoid the boom and bust cycles which we have experienced in the past. The macro prudential policy framework put in place by the Central Bank is intended to help achieve that objective. From a financial stability perspective, mortgage insurance needs to effectively transfer risk away from the banking system and from the State in a cost effective way (and to do so without giving rise to stability concerns elsewhere in the financial system) while also operating in the best interest of consumers. Due to this imperative to effectively transfer risk, I would not see a role for the State in underwriting, or guaranteeing the provision of, mortgage default insurance in relation to high LTV residential mortgages.
251. Deputy Thomas P. Broughan asked the Minister for Finance the measures he will take to address the high cost of motor insurance for young drivers; if he will consider re-establishing the Motor Insurance Advisory Board to investigate the issue; and if he will make a statement on the matter. [13416/16]
View answerAs Minister for Finance, I am concerned that there should be a stable insurance sector and that risks to policyholders and to the wider financial system are limited. I am aware of the increasing cost of motor insurance. However, the ability of the Government to influence insurance pricing is limited as insurance companies are required under European law to price in accordance with risk and neither I, as Minister for Finance, nor the Central Bank of Ireland, have the power to direct insurance companies on the pricing of insurance products.
While the provision and the pricing of insurance policies is a commercial matter for insurance companies, this does not preclude the Government from introducing measures that may, in the longer term, lead to a better claims environment that could facilitate a reduction in claims costs.
The question of the cost of insurance is a complex one involving a number of Government Departments, State Bodies and private sector organisations. While I do not intend re-constituting the Motor Insurance Advisory Board at this time, I have asked my officials to examine the factors which contribute to increasing costs of insurance.
This work is part of an overall review of policy in the insurance sector which my Department is carrying out in consultation with the Central Bank and other Departments, Agencies and external stakeholders. The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector.
The Review of Policy in the Insurance Sector will continue over the coming months and is expected to be completed by the end of this year.
252. Deputy Thomas P. Broughan asked the Minister for Finance the estimated cost of restricting the 2% levy on non-life motor insurance policies to the first €1,000 of the premium; and if he will make a statement on the matter. [13417/16]
View answer253. Deputy Thomas P. Broughan asked the Minister for Finance if he will restrict the 2% levy on non-life motor insurance policies to the first €1,000 of the premium in view of the increasing amounts being charged, particularly to young drivers, and as such a measure would make a contribution to reducing the cost of motor insurance for younger drivers; and if he will make a statement on the matter. [13418/16]
View answerI propose to take Questions Nos. 252 and 253 together.
In my role as Minister for Finance, I have responsibility for the development of the legal framework governing financial regulation. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are accepting and adequate provisioning to meet these risks.
The purpose of the Insurance Compensation Fund (ICF) is to provide a certain minimum level of protection for non-life insurance policyholders should an insurance company go into liquidation. The Fund also allows insurance company administrators to apply to the High Court for funding, where necessary, in order to enable them to meet their financial obligations as they arise.
Section 6 of the Insurance Act 1964 provides that the Central Bank of Ireland has responsibility to carry out an annual assessment of the needs of the Fund and, where it is of the opinion that the state of the Fund is such that financial support should be provided for it, the Bank is allowed to determine an appropriate contribution to be paid to the Fund by each insurer in relation to insured risks in the State. The Central Bank is independent in this assessment and I, as Minister for Finance, do not have a role in deciding annually on the amount of the levy. The ICF levy is currently charged as 2% of the aggregate of total gross written premium of each non-life insurer, the maximum level the Central Bank is allowed to set the levy as per Insurance Act 1964.
It should be noted that the levy is charged on the insurance industry and not on individual policyholders and, therefore, it is a matter for each insurance company to decide the amount of the levy, if any, that they wish to pass on the individual policyholder. In practice, it would appear that most insurers pass the levy directly onto their policyholders.
Data in respect of individual insurance premiums are held by the insurance companies. My officials have consulted with Insurance Ireland regarding the availability of data regarding the cost of individual insurance premiums and are advised that because of competition law and data protection regulations, Insurance Ireland does not publish information about the size of premiums charged by individual insurance companies. It is not possible, therefore, to establish the cost of restricting the levy to those motor insurance premiums in excess of €1,000.
254. Deputy Thomas P. Broughan asked the Minister for Finance the number of insurance policyholders who have secured motor insurance policies through the declined cases agreement in 2013, 2014 and 2015; and if he will make a statement on the matter. [13419/16]
View answer255. Deputy Thomas P. Broughan asked the Minister for Finance to provide details on the membership of the declined cases agreement committee; and if he will make a statement on the matter. [13420/16]
View answerI propose to take Questions Nos. 254 and 255 together.
Insurance Ireland, which represents the insurance industry in Ireland, operates a Declined Cases Agreement, which all motor insurers in Ireland are required to sign up to as part of their authorisation requirements.
I have been informed by Insurance Ireland that the agreement is administered by a Committee made up of representatives of each of the companies who have signed the agreement. The Committee also includes a representative of the Consumers' Association of Ireland and the Financial Services Ombudsman's Bureau as external observers.
Insurance Ireland has informed me that number of cases for 2015 is not yet available but, the number appears to be marginally higher than 2014. The following table sets out the number of cases dealt with under the Declined Cases Agreement in the previous three years.
|
Year |
Number of cases |
|
2012 |
178 |
|
2013 |
308 |
|
2014 |
669 |
256. Deputy Michael McGrath asked the Minister for Finance the circumstance in which a bank is required to consult with his Department when it is proposing a disposal of a loan or loans; if the disclosure requirements distinguish between residential mortgage, buy to let and commercial loans; and if he will make a statement on the matter. [13434/16]
View answerThe only banks which may be required to consult with my Department in the event of a large asset disposal are AIB and Permanent TSB. These banks may be obliged to consult with me under the terms set out in their respective Relationship Framework Agreements. The Relationship Framework Agreements govern what has been designed to be an arms-length relationship between the institutions, who operate independently on a commercial basis, and my Department.
Under the terms of the Relationship Framework Agreements, AIB and PTSB are required to consult with me in relation to "any material acquisitions, disposals, investments, realisations, reorganisations, restructurings or other transactions". A material matter is defined in the documents as "an acquisition, investment or disposal other than in the ordinary course of business and the total purchase price, investment or proceeds" that is likely to exceed €100 million in the case of AIB, or likely to exceed €50 million in the case of PTSB. No distinction is made in the agreements between different types of assets or loans.
The full texts of the Relationship Framework Agreements for AIB and Permanent TSB can be found at:
AIB: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf
PTSB: http://finance.gov.ie/sites/default/files/Relationship%20Frameworks%20for%20the%20Irish%20Banks%20Irish%20Life%20and%20Permanent.pdf
257. Deputy Michael McGrath asked the Minister for Finance if he has given consideration to requiring pre-approval from the Central Bank for the disposal by bank and non-bank lenders of residential mortgages until such time as the Central Bank is satisfied that the purchaser of the loan has put in place adequate procedures for the resolution of arrears cases and satisfactory administration of such loans; and if he will make a statement on the matter. [13435/16]
View answerThe Deputy will be aware that the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted on 8 July 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears, Code of Conduct for Business Lending to Small and Medium Enterprises and the Minimum Competency Code) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which comes into operation on 1 July 2016. The Code of Conduct for Mortgage Arrears provides protections for borrowers who endeavour to meet their commitments in relation to their mortgages and the 2015 Act ensures that these protections apply when a loan has been sold. Credit servicing is broadly defined and includes managing or administering repayments under the credit agreement and the process by which a relevant borrower's financial difficulties are addressed.
It is a matter for the purchaser of loans to ensure that they comply with all Irish legislation, including the rules relating to credit servicing. Purchasers of loan books must either be regulated by the Central Bank themselves or else the loans must be serviced by a credit servicing firm that is regulated by the Central Bank.
Requiring pre-approval runs the risk of imposing unnecessary costs on possible purchasers when the credit servicing will be regulated in any case.
258. Deputy Michael McGrath asked the Minister for Finance the number and value of commercial loans held by non-bank lenders; and if he will make a statement on the matter. [13437/16]
View answerI have been advised by the Central Bank that it does not publish data on this basis. However, the Credit Demand Survey conducted on behalf of the Department monitors the requirements for SMEs, the latest available survey indicates that non-bank finance for SMEs is considerably lower than bank finance. For the period April 2015 to October 2015 the survey indicates that 10% of SMEs sought non-bank finance, this represented a reduction of 1% on the previous period.
The Government remains committed to the SME sector, as reflected in the recently published Programme for a Partnership Government, and sees it as a key engine of ongoing economic growth. Consequently, my Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit on both a macro and sectoral basis in order to ensure that sufficient access to finance is available to facilitate participants in the SME sector to reach their full potential in terms of growth and employment generation. In this context, the Action Plan for Jobs 2016 includes a dedicated chapter and associated integrated set of actions to support the financing for growth in the SME sector.
259. Deputy Michael McGrath asked the Minister for Finance the number and value of residential mortgages held by non-bank lenders; and if he will make a statement on the matter. [13438/16]
View answerThe Central Bank has informed me that, at end-2015, the total value of residential mortgages held by the non-banks was €8.6 billion, numbering 47,402 mortgage accounts for Principal Dwelling House and Buy to Let combined.
Further details are available on the Central Bank's website.
As I have previously said, the sale of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.
260. Deputy Michael McGrath asked the Minister for Finance the number and value of residential home loans or mortgages held by credit unions; and if he will make a statement on the matter. [13439/16]
View answerI have been informed by the Central Bank that up until March 2016 data in relation to residential home loans or mortgages held by credit unions was not collected. However, since March 2016 credit unions are required to report on the amount outstanding in House Loans in their Quarterly Prudential Returns to the Central Bank. A House Loan is defined as a loan made to a member secured by property for the purpose of enabling the member to:
1. have a house constructed on the property as their principal residence;
2. improve or renovate a house on the property that is already used as their principal residence;
3. buy a house that is already constructed on the property for use as their principal residence; or
4. refinance a loan previously provided for one of the purposes specified in (a), (b) or (c) for the same purpose.
Based on March 2016 Prudential Returns made by credit unions to the Central Bank, I have been informed that the total amount outstanding in House Loans as at 31 March 2016 is €106.5 million and that the number of outstanding House Loans is circa 5,000 loans.
261. Deputy Gerry Adams asked the Minister for Finance the properties the National Asset Management Agency currently owns in Counties Louth and Meath; the number of these properties that may be suitable for the provision of social housing; and if he will make a statement on the matter. [13461/16]
View answerThe Deputy will be aware that NAMA does not own residential property. Rather NAMA has acquired loans and its role is that of a lender with claims over security for its loans, like a bank, rather than a property owner or lessor. In that capacity, NAMA holds security over properties that are owned by its debtors or, in the case of enforcement, which are managed on behalf of those debtors by duly appointed insolvency practitioners.
I am advised that there are approximately 6,000 completed residential properties over which NAMA holds security in relation to its loan portfolio. 99% of these properties are occupied. The other 1% is frictional vacancy due to tenants relocating as leases roll over and expire.
I would refer the Deputy to the information provided in my response to Parliamentary Question 115, of 24th May 2016, which outlines the extent of NAMA's involvement in residential properties in County Louth.
Separately, in relation to County Meath, NAMA has an exposure to approximately 60 residential properties through its loans, comprising 35 apartments, 32 of which are currently occupied, and 27 houses, 23 of which are occupied. I am advised that similar to County Louth, the unoccupied units represent frictional vacancies as properties are in process of being sold or tenanted.
NAMA has consistently been mindful of commercially attractive opportunities in the social housing sector and has innovated to combine its commercial priorities with due consideration of ancillary social contributions. In this regard, I am advised that NAMA has offered 6,635 residential units, which were potentially suitable for social housing, to Local Authorities.
I am advised that, as of end March 2016, 30 such units were offered in Louth and 235 in Meath. Demand was confirmed for 27 units in Louth, all of which have been delivered, and there was no demand confirmed for the remaining 3 units. Of the 235 units offered Meath, demand was confirmed for 63 units, 38 of which have been delivered and 25 of which are being readied for delivery. I understand that there was no demand confirmed for 60 units, and a further 28 units were not accepted as they would have led to an over concentration of social housing. I am further advised that the remaining 84 units offered, by NAMA, in Meath were either sold or rented in the private market over the course of their consideration for social housing.
Determining the take up and suitability of offered properties for social housing purposes rests with the Local Authorities, the Housing Agency and the Approved Housing Bodies. Where demand is confirmed for a property, NAMA makes whatever funding is needed, more than €100 million to date, to ensure that previously unfinished properties are completed and comply fully with all building standards.
While there are no further units currently on offer for social housing in Louth and Meath, I understand that NAMA is currently re-examining the entirety of its remaining portfolio to identify if any additional units may be available to offer to local authorities nationwide.
There is extensive information on this initiative on NAMA's website via:https://www.nama.ie/social-initiatives/.
262. Deputy Mick Barry asked the Minister for Finance to introduce a regulation obliging car insurance providers to take into account the safe driving record maintained by returning emigrants when they lived abroad who are currently being treated as new drivers when seeking insurance here with consequential high premiums. [13482/16]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation but am prohibited from interfering in the provision or pricing of insurance products. The EU framework for insurance expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing, or terms and conditions of an insurance product.
The provision of insurance cover and the price at which it is offered, including the granting of no claims discounts, is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks. These are considered by insurance companies on a case by case basis. Variations in the costs and risks of providing motor insurance cover can vary between different countries.
Insurance Ireland, which represents the insurance industry in Ireland, has informed me that, in general terms, where there has been no motor insurance in an individual's name and there is a gap of cover of two years or more since their last insurance, the no claims discount is deemed invalid. However, Insurance Ireland has further stated that if the individual can produce confirmation that they were continually insured and are claims free in their own name while they were away, this would be taken into consideration.
Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. In the event that a person is unable to obtain a quotation for motor insurance or feels that the premium proposed or the terms are so excessive that it amounts to a refusal to give them motor insurance, they should contact Insurance Ireland, 5 Harbourmaster Place, IFSC, Dublin 1, Telephone +353 1 6761820 quoting the Declined Cases Agreement.
263. Deputy Fergus O'Dowd asked the Minister for Finance the position for retired PAYE workers who are recipients of a small foreign pension marginally in excess of €3,000 and who would prefer to opt for PAYE tax assessment, but must be assessed on self-assessment; if he will increase the limit for PAYE assessment for such persons to, for example, €4,000; and if he will make a statement on the matter. [13506/16]
View answerI am advised by the Revenue Commissioners that, in general, taxpayers who are "chargeable persons" under the self-assessment system (for example, individuals who carry on a trade, or have non-PAYE income such as investment income or foreign pensions) are required to submit a tax return and self-assessment to Revenue by 31 October of the year following the tax year in question (or by mid-November, if paying and filing through the Revenue On-Line Service).
However, under section 959B of the Taxes Consolidation Act 1997, a taxpayer who has income taxed under the PAYE system (such as a salary or a private pension) and who also has taxable non-PAYE income which does not exceed the income limit provided for in section 959B may request Revenue to reduce their annual PAYE tax credits and rate band entitlements, so that the tax on their non-PAYE income is deducted by their employer or pension provider rather than by way of an annual assessment.
The annual income limit was set at €3,174 for the tax years to 2015 inclusive. However, I increased the limit to €5,000 with effect from the tax year 2016 in Finance Act 2015. The increased limit should reduce the number of taxpayers with low levels of non-PAYE income who are required to submit annual tax returns for 2016 and subsequent years.
264. Deputy Michael McGrath asked the Minister for Finance the position with the release of funds relating to the sale of property as part of the estate of a deceased person (details supplied). [13534/16]
View answerI am advised by Revenue that the matter has been finalised and confirmation has been provided to the Solicitors that the funds in the estate concerned may be released.
265. Deputy Ruth Coppinger asked the Minister for Finance to report on his meetings with a bank (details supplied) in 2016; if he discussed the sale of the bank's sale of its distressed mortgage portfolio; and if he will make a statement on the matter. [13538/16]
View answerWhile I have not met with the bank in question in 2016 on these matters, my officials were informed at a meeting in April of the outlines of the bank's deleveraging plans which had been the subject of some public and media commentary at the time. The officials again met with representatives of the bank in the morning of 25 May and were provided with more details of the sale which the bank announced later that day.
As I have previously said, the sale of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.
I would also add that active engagement by indebted borrowers with their lender is key to achieving a sustainable resolution, and I would urge borrowers in arrears, who have not already done so, to take that first step by contacting their lender directly or MABS for an independent assessment of their situation and advice on available resolution options.
