Written Answers Nos. 214-228
214. Deputy Joan Burton asked the Minister for Finance the progress his Department has made with the Central Bank on the request by a number of credit unions to expand their debit card and mortgage services; and if he will make a statement on the matter. [9954/17]
View answerThe Credit Union Act, 1997 (1997 Act) and the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (2016 Regulations) (which set out services exempt from additional services requirements), set out the services that a credit union may provide to its members. Where a credit union wishes to provide services to its members, other than those services that are provided for under the 1997 Act or the list of services exempt from the additional services requirements set out in the 2016 Regulations, an application may be made to the Central Bank for approval to provide such additional services in accordance with the provisions set out in sections 48-52 of the 1997 Act.
Debit card provision (and the necessary underlying payment account service) is an additional service and as such requires Central Bank approval. The Central Bank has recently approved a suite of additional services known as a Member Personal Current Account Service (MPCAS) under the Additional Services Framework set out in sections 48-52 of the 1997 Act. This service, which was recently approved for 6 applicant credit unions provides for credit unions to offer debit cards, overdrafts and a full range of payment services within an appropriate risk framework. Details of MPCAS and the approval process, along with the application requirements and related guidance are on the Central Bank's website. In its communication to the sector on MPCAS on 9 December 2016, the Central Bank highlighted that it will continue to consider, all applications for provision of additional services including debit cards.
Currently credit unions can provide mortgages to members, within certain maturity limits contained in the 2016 Regulations. The 2016 Regulations set out the percentage of a credit union's loan book that can be outstanding for periods exceeding both five and ten years, as well as limits on the maximum outstanding liability to an individual member. Under the 2016 Regulations, issued by the Central Bank in January 2016, credit unions continue to be allowed to lend up to 30% of their loan book over five years and up to 10% of their loan book over 10 years, subject to a maximum maturity of 25 years. In addition, credit unions are able to apply to the Central Bank for an extension to their longer term lending limits (up to 40% of their loan book over 5 years and up to 15% of their loan book over 10 years). Approval is subject to conditions set by the Central Bank. There are 11 credit unions approved to avail of increased longer term lending limits.
The Central Bank informs me that the December 2016 Prudential Return indicates that for the sector overall, total gross loans over 10 years amount to c. 2.7% of total loans in the credit union sector compared to the limit of 10% (and 15% in some cases).
The Central Bank has indicated that while it can see longer term lending, including mortgages, as part of a balanced portfolio of total lending, in their analyses credit unions need to consider the impact of longer term lending on interest margins, return on assets and on balance sheet structure as the issue of funding longer term lending with short term funding is a challenge for the credit union business model. The Central Bank further informs me that consumer mortgage lending is an activity that has its own unique risk profile, and proposals to become involved in mortgage lending in a significant way must be supported by an evidenced based business case.
The Credit Union Advisory Committee's (CUAC) recent report provides a number of recommendations, one of which is to conduct a full review of lending limits. I have established an Implementation Group which is currently looking at those recommendations with a view to implementation as appropriate. One area which the Implementation Group is focussing on is an examination of lending limits and concentration limits. I look forward to regular progress reports from the Implementation Group as these recommendations are developed and implemented.
215. Deputy Brendan Smith asked the Minister for Finance if his attention has been drawn to the delays in having claims for compensation finalised and submitted to a body (details supplied) for persons that lost investments with a company (details supplied); the measures he proposes to implement to eliminate these delays and have compensation payments made at an early date; and if he will make a statement on the matter. [9969/17]
View answerI have been informed that to date, the ICCL has received 1,977 claims for compensation from former clients of Custom House Capital Ltd (CHC). All claims received are passed to the Administrator, Mr Kieran Wallace, who is required to certify the compensable loss involved for each claimant, following which notification, the ICCL will arrange payment of compensation to the investors concerned.
As at 24 February 2017, the ICCL had paid out over €7.2 million to some 570 claimants. It is estimated by the Administrator that further compensation amounting to €12.9 million will arise in respect of the c. 1,407 claims still outstanding, resulting in a final compensation bill of €19.7 million. This amount has been fully provided for in the ICCL's accounts.
Under the terms of the Act the ICCL is obliged to pay compensation within three months of the certification of the relevant claim by the appointed Administrator of the investment firm concerned and notification to the ICCL. The liquidation and administration of CHC has proved to be a complex and protracted exercise partly due to a number of legal issues arising in the course of the liquidation of the firm.
Unfortunately, this has resulted in lengthy delays in the certification of claims by the Administrator. ICCL have been seeking to address these matters on an on-going basis and have made proposals to the Administrator regarding the acceleration of the certification process and are awaiting further developments.
During 2016 the Board of ICCL established a working group to formulate potential remedies to certification delays experienced in current claim cases. In November 2016 this working group issued a report to myself and the Governor of the Central Bank of Ireland wherein conclusions and recommendations were highlighted with the general objective of improving the outcome for the clients concerned.
While a number of the proposals put forward are being progressed by the ICCL, others would encompass amendments to legislation.
ICCL is currently consulting with the Central Bank, as the supervisory authority for investor compensation and once completed will then engage with my Department on these proposed amendments.
216. Deputy Brendan Smith asked the Minister for Finance if his attention has been drawn to the very serious concerns regarding the level of compensation being paid by a body (details supplied) to persons who lost major investments through a company (details supplied); and if he will make a statement on the matter. [9970/17]
View answerThe Irish Investor Compensation Scheme (the "ICS"), operated by the Investor Compensation Company DAC (the "ICCL"), originates from the EU Directive 97/9/EC ("ICSD") which requires each Member State to establish, on a minimum harmonisation basis, an Investor Compensation Scheme to ensure that small investors can receive statutory levels of compensation when they suffer losses to their assets as a consequence of fraud.
I have been informed by the ICCL that the €20,000 maximum compensation limit currently in place has satisfied the claims of the majority of small investors in the nine compensation cases that it has handled since 1998. On the basis of advice provided to the ICCL from Mr Kieran Wallace the Administrator of CHC, the average compensation payment in the case of CHC is estimated at circa €10,000 per investor.
In addition, I would like to note that since the failure of CHC in 2011 the Central Bank of Ireland has been provided with extensive new powers to help prevent the loss of client assets as occurred in that case. These powers relate to new rules for safekeeping of client assets, new rules in respect of key management positions and enhanced monitoring and enforcement powers for the Central Bank.
217. Deputy Joan Burton asked the Minister for Finance the contact he has had with fellow EU Heads of Government regarding a case (details supplied). [1816/17]
View answerOn 30 August 2016, it was announced that the Commission had issued a negative decision in the Apple State Aid case.
The Government remains of the view that there was no breach of State Aid rules in this case and that the legislative provisions were correctly applied. By appealing the Decision the Government is taking the necessary course of action to vigorously defend the Irish position.
Member States have legal standing to intervene in all cases that go before the European courts and do so from time-to-time if it is considered that the case raises points of relevance for their country.
It is the view of the Government that our appeal is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign Member State competence of taxation.
I have updated fellow EU Finance Ministers on the case from an Irish perspective.
If other Member States found that the issues we are raising are of relevance for their tax system, I would welcome their support for the Irish appeal.
218. Deputy Micheál Martin asked the Minister for Finance if his officials are working on the terms of reference for a commission of inquiry into Project Eagle, which is under the remit of his Department. [7053/17]
View answerThe Deputy will be aware that, on 15 September 2016, the Taoiseach met party leaders with a view to hearing their views on the potential establishment and suitable terms of reference of a Commission of Investigation. The Taoiseach subsequently received a number of submissions on the matter.
The Taoiseach met the party leaders again on 4 October 2016 and agreed in principle that the Government will establish a Commission of Investigation under the Commissions of Investigation Act 2004 to investigate into matters of significant public concern in relation to NAMA.
I am advised that the party leaders acknowledged that there will be limitations on the Commission's work given the location of potential witnesses and documentation outside the jurisdiction and in light of ongoing criminal investigations.
In addition, Statements on the Establishment of Commission of Investigation into NAMA were taken in this House on Wednesday, 1 February 2017. As indicated on that occasion, the sensible course of action is to wait for the report of the Public Accounts Committee ("PAC") before deciding on next steps.
During those Statements, I reiterated that we have confirmed there is currently an agreement, in principle, to establish a Commission of Investigation. However, we do not currently have sufficiently specific terms of reference supported by evidence to justify the establishment of a Commission of Investigation. For this reason it is important that we receive the report of the Public Accounts Committee on Project Eagle and consider any further information this report may bring to light, the findings it presents and the evidence substantiating such findings.
This Government and many Deputies, including the PAC Chairman, are aligned in the understanding that the imminent PAC report will be invaluable in assessing our next steps. We should consider and debate the contents and findings carefully before establishing any potential terms of reference for any such Commission of Investigation. There may be well questions currently being suggested for a Commission of Investigation which will be adequately covered off by the PAC report. There may also be findings supported by evidence which warrant further investigation.
It is sensible that the Oireachtas will fully study and debate the PAC report when it arrives. The agreement in principle to establish a Commission of Investigation remains. However, we should not establish Commissions of Investigation lightly and must ensure that any Commission of Investigation has specific terms of reference supported by evidence to justify its establishment. Commissions are expensive and time consuming but serve an important purpose when other avenues of justice are not appropriate and when they are properly established on the basis of evidence to support their terms of reference.
220. Deputy Joan Burton asked the Minister for Finance the discussions he has had with his ECOFIN colleagues in view of the recent developments in respect of the common consolidated tax base; the steps he has taken in the interests of protecting Ireland's tax sovereignty; and if he will make a statement on the matter. [9981/17]
View answerThe European Commission's proposal for a Common Consolidated Corporate Tax Base was published in October 2016 and an initial discussion on the proposal took place at the November 2016 ECOFIN meeting. During the discussion, which was held in public session, a number of my fellow Ministers gave some initial impressions of the proposal.
At December ECOFIN, Council Conclusions were approved in respect of the Commission's wider package which includes the Common Consolidated Corporate Tax Base proposal but there was no discussion of the proposals at that meeting. The proposal has not been discussed at ECOFIN so far in 2017.
Technical discussions between Member States on the proposal are at a very early stage. All countries, including Ireland are examining the proposal to assess the potential impact it would have if it was to be agreed. The proposal is also likely to be subject to significant changes during these technical discussions between Member States.
As always, tax remains a matter of Member State competence and unanimity is required before any tax proposals can be agreed.
221. Deputy Michael McGrath asked the Minister for Finance the progress that has been made in respect of the liquidation of a company (details supplied); if those caught up in outstanding claims are facing any losses; the role of the insurance compensation fund; the role of the Motor Insurance Bureau of Ireland; the current estimate of the number and value of outstanding claims and the shortfall; and if he will make a statement on the matter. [10001/17]
View answerSetanta was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. Setanta is a Maltese incorporated company and therefore, the Setanta liquidation is being carried out under Maltese law. The most recent figures received by the Department of Finance from the Liquidator for Setanta is that the number of open claims is 1,658.
Progress in the liquidation has been delayed due to court proceedings in the case of Law Society of Ireland v the Motor Insurers' Bureau of Ireland (MIBI). The current position is that we are awaiting the outcome of MIBI's appeal to the High Court ruling, which was heard before the Supreme Court in October 2016. No date has been specified for the judgment.
In relation to whether any outstanding claims are facing losses, it should be noted that prior to this court case, we would have expected the Insurance Compensation Fund to have met the third party claims up to a limit of 65% and a ceiling of €825,000 per claimant. In such a situation the third party claimants would have suffered a loss due to the cap. However if the High Court ruling is upheld then the MIBI will compensate third parties fully up to a limit of €1,220,000 per claim for property, regardless of the number of claimants, while there will be no cap on payments for personal injury claims.
As the Deputy is aware, a small number of additional claims are not affected by the court proceedings and are being processed by the Office of the Accountant of the Courts of Justice due to the fact that they are 1st party claims and come unambiguously within the remit of the Insurance Compensation Fund (ICF). In relation to these policyholders the cap of 65% applies and in total €608,085 has been made to date to such Setanta policyholders.
The position in relation to 3rd party motor insurance claims is that they are unlikely to be processed until after the outcome of the Supreme Court appeal.
The Liquidator for Setanta has informed me that:
- Claims provision required stands at between €87.7 million and €95.2 million.
- Setanta policies were cancelled in May 2014. The 2 years allowable under the statute of limitation to lodge claims has expired so the claims figures will not increase further.
- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal.
- The Liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims.
I expect to be able to provide a more accurate update after the legal proceedings are concluded.
222. Deputy Michael McGrath asked the Minister for Finance the motor insurance compensation framework in place at present in the event of a motor insurance firm being liquidated; and if he will make a statement on the matter. [10002/17]
View answerInsurance guarantee schemes provide last-resort protection to policyholders and beneficiaries when insurers are unable to fulfil their contractual commitments. They protect against the risk that claims will not be met in the event of a failure of an insurance undertaking.
The main insurance guarantee scheme in Ireland is the Insurance Compensation Fund (ICF) which covers the liabilities of insurance policyholders in the event of a failure of a non-life insurance undertaking (other than a health insurer).
The ICF is primarily designed to facilitate payments to policyholders in relation to risks in the State where an Irish authorised non-life insurer or a non-life insurer authorised in another EU/EEA Member State which is providing insurance in respect of risks within the State, goes into liquidation and the approval of the High Court has been obtained for such payments.
With the approval of the High Court, money may be paid out of the Fund to the liquidator of an insolvent insurer to meet claims (other than the refund of a premium) due to a natural person under a policy issued by the insurer, up to a limit of 65% of such claims and a ceiling of €825,000 per claimant. Payments from the Fund are made only where it is determined by the High Court that it is unlikely that the claim can be met otherwise than from the Fund.
The Deputy will also be aware that the High Court decision in September 2015, ruled the MIBI liable for third party motor insurance claims in the event of the liquidation of an insurance company. This decision was appealed by the MIBI, however in March 2016, the Court of Appeal dismissed the appeal. Subsequently, in April 2016, the Supreme Court made an order allowing an appeal to that Court. This appeal was heard by the Supreme Court in October 2016 and judgement was reserved. No date has been specified for judgement.
MIBI's main purpose is to pay financial compensation to innocent victims of uninsured and/or untraced vehicles. The MIBI compensates for death or injury to a person, or damage to property which is required to be covered by an approved policy of insurance under section 56 of the Road Traffic Act 1961. The amounts payable in respect of claims under the Road Traffic Act is 100% to a current limit of €1,220,000 per claim for property, regardless of the number of claimants. The limit does not apply in the case of personal injury.
Finally, the Review of the Framework for Motor Insurance Compensation in Ireland, which was published in June 2016, sets out the Joint Working Group's assessment of the current framework and makes recommendations to provide certainty regarding the compensation framework in Ireland. Its key recommendations are:
- The level of cover from the ICF for third party motor insurance claims be increased from 65% to 100% in line with that currently provided by the Motor Insurers' Bureau of Ireland.
- The increased coverage of the ICF be funded by a direct contribution to the ICF from the motor insurance industry. While the Review indicated that this would come via the Motor Insurers' Bureau of Ireland, to the value of 35% of the third party motor insurance claims, further discussions are ongoing with industry about options for alternative funding arrangements which would provide greater predictability about their financial exposure.
223. Deputy Michael McGrath asked the Minister for Finance if he will provide an update on the impact of the collapse of a company (details supplied); if those caught up in outstanding claims are facing any losses; the role of the insurance compensation fund; the role of the Motor Insurance Bureau of Ireland; the current estimate of the number and value of outstanding claims and the shortfall; and if he will make a statement on the matter. [10003/17]
View answerEnterprise Insurance Company plc (Enterprise) is a Gibraltar incorporated company and, therefore, the Enterprise liquidation is being carried out under the laws of Gibraltar. The situation around the Enterprise liquidation is an evolving one. The position as it currently stands is as set out below.
A Provisional Liquidator was appointed to Enterprise on 25 July 2016. A report of the Provisional Liquidator was considered by the Supreme Court of Gibraltar on 26 October 2016, after which the Supreme Court agreed with the appointment of a liquidator to Enterprise. Upon appointment, the Liquidator disclaimed all Enterprise motor policies resulting in all motor policies written by Enterprise ceasing to be effective from midnight 26 October 2016.
According to the Enterprise website, the Liquidator is currently confirming arrangements for the management of claims as well as establishing the process by which claims may be submitted. Directions for the submission of claims will be detailed on the website of for Enterprise (www.eigplc.com/) as soon as they are available. Persons who have a query or a claim should contact the Liquidator and his team on telephone number 00 350 200 50150 or info@eigplc.com.
My officials are liaising with the liquidator to find out the number and value of outstanding claims. At this stage, this information has not been made available.
In relation to refunds for outstanding cover on policies, Enterprise's agent in Ireland, Wrightway Underwriting Ltd, has advised the Central Bank that it has informed brokers to make an ex-gratia payment to affected policyholders. This payment will be equal to the value of the premium from 26 October 2016 until the end of the current policy contract . Policyholders are advised by the Central Bank to discuss any such refunds with their broker.
In relation to the role of the Insurance Compensation Fund (ICF) the Deputy should note that it provides for payments to meet the liabilities of insolvent insurers in certain cases where it is unlikely that claims can be met otherwise than from the ICF. Management and administration of the ICF is under the control of the President of the High Court acting through the Office of the Accountant of the Courts of Justice. Under the Insurance Act 1964, in a liquidation all ICF payments are subject to a limit of 65% of the amount due or €825,000, whichever is the lesser. In addition, claims by bodies corporate or incorporated bodies are not covered by the ICF, except where there is a liability to or by an individual.
In relation to the role of the Motor Insurance Bureau of Ireland (MIBI), the High Court issued a decision in the Law Society of Ireland v the MIBI case to the effect that the MIBI's liability under the 2009 Agreement extended to situations of insurer insolvency (subject to each individual claim being deemed eligible). This decision was then appealed by the MIBI, however in March 2016, the Court of Appeal dismissed the appeal. Subsequently, in April 2016, the Supreme Court made an order allowing an appeal to that Court. This appeal was heard by the Supreme Court in October 2016 and judgement was reserved. No date has been specified for delivery of the judgment. If the High Court ruling is upheld then the MIBI will be liable to compensate third parties up to a limit of €1,220,000 per claim for property, regardless of the number of claimants, while there will be no cap on payments for personal injury claims.
224. Deputy Eamon Ryan asked the Minister for Finance the outcome of the recent European Financial Forum in Dublin Castle; and the role his Department is taking in relation to the attraction of new financial service companies here. [4169/17]
View answerThe second annual European Financial Forum was held on 24 January 2017 and was a key deliverable as part of the IFS2020 Strategy's Action Plan for 2016. The event was hosted by my colleague Minister of State for Financial Services, Eoghan Murphy TD, who has responsibility for the IFS2020 strategy. IDA Ireland and EI had lead responsibility for organising this event, in consultation with the Department of Finance and other key public sector and industry stakeholders. I attended the closing sessions of the EFF and gave the final remarks to close off a day of very interesting speeches, panel discussions and presentations.
The European Financial Forum 2017 was a tremendous success with approximately 700 delegates in attendance, representing around 400 companies from 30 countries. The 2017 Forum featured keynote speakers and panel discussions on a number of themes. A major focus for the 2017 Forum was the macro economic outlook for the global economy and impacts for financial services. Given the many international developments in 2016, the EFF2017 was particularly timely in shaping the discussion around the outlook for financial services in our ever changing world. Preliminary planning has begun for a possible third European Financial Forum early in 2018.
EFF 2017 featured 24 domestic and international speakers which included President of the Asian Infrastructure Investment Bank, Jin Liqun; Blackrock Vice Chairman, Philipp Hildebrand; and Credit Suisse Vice-Chair of the Board of Directors (and Chair of the British Bankers' Association), Noreen Doyle among others.
Minister of State Murphy launched IFS2020 Action Plan for 2017 the evening before the forum. The 2017 plan was drafted following extensive engagement with both public and private sector stakeholders through the IFS2020 implementation framework. The 2017 Action Plan is divided into two sections. Section one is a contextual piece outlining the development of the Strategy with a strong focus on Brexit while section two contains the suite of 40 individual measures to be actioned in 2017 under the IFS2020 strategic priorities, with the Department or agency responsible for each measure, and the timeline for delivery. A copy of the 2017 Action plan was provided to each attendee of the EFF.
Since his appointment Minister Murphy has undertaken a significant number of overseas visits to promote Ireland as a destination for financial services investment and launch the IFS Ireland banner brand. In September 2016 Minister Murphy travelled to Singapore, Shanghai and Tokyo, in October he visited New York and Washington and in January participated at the Asian Financial Forum in Hong Kong while also visiting Beijing.
Minister of State Murphy will continue to promote Ireland overseas as the perfect European location for financial services investment as the IFS2020 Strategy moves into 2017, with upcoming engagements in London, Brussels and a visit to Asia in May. Minister Murphy will of course meet with international IFS firms and promote our financial services offering during his St Patrick's Day visits to Montreal and Toronto. In addition officials from my department continue to engage with key financial services stakeholders through the IFS2020 framework to ensure continued growth and development of the international financial services sector in Ireland.
225. Deputy Brendan Howlin asked the Minister for Finance if he has raised Ireland's bid to secure the European Banking Authority with his EU counterparts in bilateral meetings. [2781/17]
View answerWhile I personally have not specifically raised this issue in talks, I would point out that Minister of State, Deputy Eoghan Murphy along with my officials are using every opportunity, to promote Ireland as a location of choice for the European Banking Authority.
We place a strong emphasis on Financial Services as can be seen from the growth and development of this sector both in the International Financial Services Centre in Dublin and other locations in the country. I believe that the location of international financial institutions in Ireland sends a positive signal to global financial services sector of the importance Ireland place on its international financial services sector.
The continued growth and development of the financial services is also one of the aims in our IFS 2020 plan which was published in 2015. This plan has 40 actions for this year, one of which (number 35) is specifically to promote Ireland "as the location of choice for the European Banking Authority".
I would like to point out that the ultimate decision on relocation of the European Banking Authority will be made by both the European Council and Parliament and will be linked to the triggering of Article 50 by the UK and subsequent negotiations between it and the European Union.
226. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of abolishing the universal social charge, USC, and the impact on fiscal space in 2018, 2019, 2020, 2021 and 2022; and if he will make a statement on the matter. [10054/17]
View answerThe fiscal forecasts contained in Budget 2017 set out projections in respect of 2017 to 2021. Projections beyond 2021 are not available at this stage.
The indicative net fiscal space over the 2018 to 2021 period is some €9.3 billion in cumulative terms (as outlined in Budget 2017 Table A7).
It should be noted that indicative fiscal space highlighted in the budgetary annexes require a number of assumptions, including in relation to reference rates for potential growth, deflators and certain other variables used in calculation. These inputs are based on current projections and are likely to change over time.
In 2017, the Universal Social Charge (USC) is projected to raise approximately €3.7 billion in Exchequer receipts terms, with this level expected to increase, on a dynamic basis, as employment and wage growth are projected to continue over the forecast horizon. This projection incorporated the €335 million first year cost of the USC changes announced in the recent Budget. It is estimated that the Budget 2017 USC measures would cost €385 million in a full year.
The actual cost of abolishing the USC over the medium term, i.e. to 2021, would be impacted by the phasing used but in terms of the broad order of magnitude, it would absorb around 40% of the currently available net fiscal space out to 2021.
227. Deputy Paul Murphy asked the Minister for Finance the amount of debt repaid by debtors who are leaving NAMA; the amount of debt they had owed when entering NAMA; and if he will make a statement on the matter. [10071/17]
View answerIn answering the Deputy's question I would refer the Deputy to the information that is published by NAMA on a quarterly basis as part of its Section 55 report. This information is laid before the Houses and is available on the NAMA website.
Footnote 15 of the NAMA quarterly Report and Accounts sets out a full reconciliation of the movement in NAMA's loans and receivables. This quarterly reconciliation provides a great deal of insight into the various movements in loans and receivables over the life of NAMA.
The Supplementary Information Provided as part of the Section 55 report also provides helpful detail regarding the NAMA loan book. Section 4, romanette 2, entitled the "Number and Condition of Outstanding Loans," provides high level loan performance metrics. Section 4, romanette 3, entitled "Categorisation of non-performing as the degree of default," categorises all non-performing loans by degree of default. Both of these sections contain detailed information regarding:
- the number of loans outstanding;
- the nominal value of these loans (i.e. the amount owed to NAMA by the borrower);
- NAMA's carrying value pre-impairment; and
- NAMA's carrying value less impairment.
These reports, which have been published quarterly since NAMA's inception, provide a rich source of information regarding the progression of the NAMA loan book over time and allows any interested party to monitor the progression of the NAMA loan book, including:
- the amount of debt repaid by debtors over time;
- the amount of debt owed by debtors over time;
- the performance and delinquency status of that debt over time;
- the value NAMA attributes to that debt, over time; and
- the number of connections to which that debt relates, over time.
This information provides the Deputy with a rich history of data which am sure will be of interest in answering his question and providing additional insight into the NAMA loan book.
228. Deputy Paul Murphy asked the Minister for Finance if he will report on his efforts to improve the provision of affordable motor insurance; his views on whether the levels of profit in the sector needs to be focused on; and if he will make a statement on the matter. [10072/17]
View answerThe Working Group on the Cost of Motor Insurance, chaired by Minister of State, Deputy Eoghan Murphy, completed its Report in December 2016. The Report was approved by the Government on 10 January 2017 and subsequently published. It sets out a detailed set of 33 recommendations and 71 actions to tackle those factors that are influencing the increasing cost of motor insurance by introducing a comprehensive suite of reforms for the insurance sector some of which can be actioned immediately or are already underway and others which will require a longer period of time to put in place. Implementation of the Action Plan has already commenced.
In relation to the issue of profitability, the Deputy should note that this issue is discussed in Chapter 3 of the Report. It highlights that the industry made substantial profits between 2005 and 2008 (€2.2bn of which €1bn approx. related to motor insurance). However during the period from 2009 to 2015, there were underwriting losses of €1.3bn, with motor insurance accounting for €900m of this. It should also be noted that the low interest rate environment has materially affected the levels of interest or investment income which insurers can earn and has reduced their ability to compensate in part for their underwriting losses.
The issue of profitability therefore has been problematic for the industry in the last few years and this has been a contributory factor to the price increases over the last 18 months.
My primary focus at this stage is ensuring that the Cost of Motor Insurance Report is fully implemented as I believe this will lead to greater stability in the pricing of motor insurance and will help prevent the volatility that we have seen in the market in the past (both up and down). It should also better facilitate new entrants into the market which in turn should provide consumers with a greater choice of companies to choose from.
