Insurance 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. Such schemes can offer protection by paying compensation to policyholders or beneficiaries, or by securing the continuation of insurance contracts.
There is no common EU framework in the insurance sector in relation to insolvencies, as exists in other sectors, e.g. bank deposits. As part of the recent review of motor insurance compensation in Ireland, my Department established that there are a wide variety of insurance guarantee schemes in other jurisdictions. Comparing these arrangements to the Irish compensation framework was difficult as there were significant differences between the schemes established. For example, these differences relate to eligibility restrictions, protection limits, the nature of intervention, the funding arrangements and the corresponding financial capacity of the schemes. The Deputy will appreciate therefore that, in the absence of a common EU insurance guarantee scheme, it is difficult to provide the information sought given the differences outlined above. The provision of such a list may create an incorrect impression that each of the schemes is directly comparable.
The European Commission undertook a review in 2010 of the insurance compensation issue. My Department responded at the time and indicated that Ireland was in broad agreement with the objectives of the White Paper and supported most of the specific proposals contained therein. In particular, it sought the inclusion of motor insurance business in any proposal from the Commission as its inclusion would ensure appropriate harmonised treatment of all claims of a particular insurance undertaking in the event of an insolvency. The European Commission has not subsequently advanced their work in this area , and I am not aware of any imminent developments on this front.
Finally, I have attached a link to a 2007 Oxera Report titled "Insurance guarantee schemes in the EU Comparative analysis of existing schemes, analysis of problems and evaluation of options" which should provide some greater insight into the complexity of the matter.
http://ec.europa.eu/internal_market/insurance/docs/guarantee_schemes_en.pdf.