Tuesday, 23 May 2017

Written Answers Nos. 175-197

Banking Sector Regulation

Questions (175)

Niall Collins

Question:

175. Deputy Niall Collins asked the Minister for Finance the regulatory framework with regard to crowd funding as a non-bank source of finance. [24075/17]

Written answers

Minister for Finance

Crowdfunding is an innovative, technology-based form of finance that can be a valuable source of funding for SMEs, either as a complement, or as an alternative, to traditional bank finance. Crowdfunding also provides consumers and small investors with access to investment opportunities that offer a higher rate of return, at a higher risk, than is generally available from traditional credit institutions.

As the Deputy will be aware, crowdfunding is not currently a regulated activity in Ireland, and the Central Bank of Ireland has issued an information notice alerting consumers to this fact, available at:

https://www.centralbank.ie/consumer-hub/consumer-notices/consumer-notice-on-crowdfunding-including-peer-to-peer-lending

The European Commission has indicated that harmonised European regulation of crowdfunding is not anticipated at present.

The IFS 2020 2017 Action Plan commits the Government to conducting a public consultation on the potential regulation of crowdfunding, having regard to international best practice and in the context of the EU Commission Action Plan on Building a Capital Markets Union. My Department launched a public consultation on the regulation of crowdfunding on the 21st April 2017 running for a period of six weeks, until 2 June 2017, available at:

http://www.finance.gov.ie/sites/default/files/200417%20Final%20Crowdfunding%20Consultation%20Paper.pdf.

The purpose of the consultation is to understand how to best facilitate the development of the evolving and innovative crowdfunding industry in Ireland, for the benefit of the economy, while also ensuring adequate protection for small investors and consumers. This examination of crowdfunding, through a public consultation, will help inform my Department's policy position on whether or not a regulatory regime for crowdfunding would be appropriate and if a bespoke regime should be implemented in Ireland.

Strategic Banking Corporation of Ireland

Questions (176)

Niall Collins

Question:

176. Deputy Niall Collins asked the Minister for Finance further to Parliamentary Question No. 62 of 11 May 2017, the name of each bank and non-bank lender of Strategic Banking Corporation of Ireland funds in 2016; and the monetary amount loaned to SMEs in tabular form. [24076/17]

Written answers

Minister for Finance

The Strategic Banking Corporation of Ireland began lending in March 2015. Its purpose is to make sustainable, flexible and appropriately priced finance available to viable Irish SMEs and support investment in them that encourages growth and facilitates employment across the whole country.  

The SBCI uses an on-lending model; this means it does not lend directly to SMEs, rather it lends through partner financial institutions known as on-lenders. The SBCI currently has eight on-lending partners, three bank and five non-bank. These are: AIB, Bank of Ireland, Ulster Bank, Finance Ireland Limited, Merrion Fleet Management Ltd, First Citizen Finance, Bibby Financial Services Ireland and FEXCO Asset Finance  

To the end of December 2016, the SBCI had committed €906m to SMEs through these 8 on-lending partners. The SBCI is currently seeking to broaden its distribution capability and market coverage; it is engaging with potential new on-lenders in this regard. Furthermore, the SBCI is working to develop innovative products, thereby serving to drive competition in the SME finance market.  

To the end of December 2016, the SBCI has lent €544 million to 12,593 SMEs. The SMEs who received SBCI finance are from a variety of business and economic sectors. More than 80% of loans are for investment purposes and the average loan size is €43,200. There is a broad regional spread of the SMEs supported, with 84.8% of them based outside Dublin.  

The following table shows the on-lenders and the amount committed by the SBCI to each on-lender in their funding agreement. This is the maximum amount of SBCI funding each on-lender has available to lend out at present. The individual amount of lending by each on-lending partner to SMEs is commercially sensitive and is not disclosed publicly.

On-Lender	Amount Committed by SBCI to On-Lender (funding agreement)
AIB	€400 million
Bank of Ireland	€200 million
Ulster Bank	€75 million
Finance Ireland	€51 million
Merrion Fleet Management	€25 million
First Citizen	€40 million
Bibby Financial Services   Ireland	€45 million
FEXCO Asset Finance	€70 million
Total	€906 million

 

Money Laundering

Questions (177)

Clare Daly

Question:

177. Deputy Clare Daly asked the Minister for Finance the organisation that will be publishing the register of financial vehicle corporations, FVCs, including special purpose vehicles, SPVs, and their ultimate beneficiary owners in view of the imminent transposition into law of the Fourth Anti-Money Laundering Directive, AMLD4 on 26 June 2017; and if he will make a statement on the matter. [24086/17]

Written answers

Minister for Finance

Article 30 of the 4th Anti-Money Laundering Directive (4AMLD) requires Member States  to ensure that corporate and other legal entities incorporated within their territory  obtain and hold adequate, accurate and current information on their beneficial ownership, including details of the beneficial interests held. It also requires the above mentioned entities to transmit their beneficial ownership information to a central register.

The requirement for corporate and other legal entities to hold their beneficial ownership information on a company register has been provided for through  the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 -SI 560/2016.

Work is ongoing in relation to the preparation of a further statutory instrument (SI) to appoint a Registrar of Beneficial Ownership of Companies and Industrial and Provident Societies who will be responsible for the establishment and maintenance of the beneficial ownership register in respect of those particular corporate entities.

The role of Registrar of Beneficial Ownership will be assigned as a separate legal responsibility to the Registrar of Companies. 

Discussions are continuing at EU level in relation to an amending proposal to the 4AMLD - known as 5AMLD - to determine what level of access should be provided to the centralised register. Pending the outcome of those discussions it is proposed to initially limit access to the register to the State AML competent authorities and the Financial Intelligence Unit of the Gardaí.  As soon as the 5AMLD is finalised, the SI will be further adapted to reflect the agreement at EU level.

Finally, you should note that as FVCs and SPVs are Irish registered corporate vehicles, S.I. 560 applies to them, as will the future requirement to file this beneficial ownership information to the above mentioned central register.

Stamp Duty

Questions (178)

Clare Daly

Question:

178. Deputy Clare Daly asked the Minister for Finance the steps he has taken to ensure that foreign companies' assets in Ireland, including loan book acquisitions, are correctly recorded with stamp duty recorded at the discounted price acquired in order to ensure capital gains tax is correctly reported and paid upon the disposal of the asset by the foreign company. [24087/17]

Written answers

Minister for Finance

I am advised by Revenue that stamp duty would generally be payable on a foreign company’s acquisition of Irish-situated property.  When submitting the stamp duty return to Revenue in respect of the acquisition of such property, the foreign company would return the amount of the consideration paid for its acquisition of the property. However, in practice, stamp duty is not generally payable on the acquisition of loans as distinct from the underlying property as the Stamp Duties Consolidation Act (SDCA) 1999 provides for a range of exemptions from the charge. Prior to 7 December 2006, stamp duty was chargeable on documents securing loans on property situated in this country and any subsequent transfer of such secured loans. Section 100 Finance Act 2007 terminated this charge for such ‘mortgage’ documents executed after this date. In such situations, there is no requirement to file a stamp duty return.

In the case of a foreign company, gains on the disposal of chargeable assets are generally liable to capital gains tax (CGT). Those assets include land and buildings situated in this country (including unquoted shares which derive their value or the greater part of their value from such assets) and assets associated with a trade carried on in this country through a branch or agency.

It should be noted that where the sale proceeds from the disposal of foreign company assets exceed €500,000, the purchaser is obliged to deduct 15% from the sale proceeds and remit that amount to Revenue unless the vendor has obtained a certificate of clearance from Revenue as regards CGT.  Such a certificate is required in the case of loans secured on land or buildings situated in this country and assets referred to in the previous paragraph which are disposed of by a foreign company.  The certificate of clearance ensures that disposals of such Irish assets come to Revenue’s attention where the sale proceeds exceed €500,000 and that any CGT due is paid in respect of gains on such disposals.

Help-To-Buy Scheme Data

Questions (179)

Niamh Smyth

Question:

179. Deputy Niamh Smyth asked the Minister for Finance the number of persons who have applied under the first-time buyers scheme as announced in budget 2017 by county in tabular form; and if he will make a statement on the matter. [24089/17]

Written answers

Minister for Finance

There are two stages involved in the Help to Buy Incentive process. Stage 1 is the application stage, wherein prospective applicants can query whether they qualify for the incentive. They can also get clarity on the maximum amount of rebate they could potentially benefit from, based on their tax paid in a four-year period. Stage 2 is the claims stage, wherein applicants that decide to proceed with purchasing or building a qualifying property must provide documentary evidence of the relevant property transaction or their mortgage draw down; it is at this point that the relevant county is identified. Revenue analyses and publishes information in relation to claims by county rather than applications by county. This and other statistical information in relation the incentive may be found at http://www.revenue.ie/en/about/statistics/htb-incentive-stats.html.

I am advised by Revenue that as at 18 May 2017, the following table sets out claims made for the incentive broken down by county:

County	Claims
Carlow	< or =  10
Cavan	< or =  10
Clare	18
Cork	165
Donegal	18
Dublin	707
Galway	65
Kerry	13
Kildare	187
Kilkenny	13
Laois	22
Leitrim	< or =  10
Limerick	53
Longford	< or =  10
Louth	32
Mayo	12
Meath	195
Monaghan	< or =  10
Offaly	19
Roscommon	12
Sligo	< or =  10
Tipperary	21
Waterford	44
Westmeath	18
Wexford	20
Wicklow	105

To protect the confidentiality of taxpayer information, where there are ten or fewer claims from a particular county, then the precise number is not shown. 

IBRC Liquidation

Questions (180, 181, 182)

Billy Kelleher

Question:

180. Deputy Billy Kelleher asked the Minister for Finance if tendering or procurement was required for companies or persons hired to assist with the liquidation of Irish Bank Resolution Corporation, such as in accounting, legal matters and so on; the companies or persons hired through this process; and if he will make a statement on the matter. [24098/17]

Billy Kelleher

Question:

181. Deputy Billy Kelleher asked the Minister for Finance the companies or persons that were hired as part of the liquidation of the IBRC; and if he will make a statement on the matter. [24099/17]

Billy Kelleher

Question:

182. Deputy Billy Kelleher asked the Minister for Finance the costs incurred in the liquidation of the IBRC; the companies and persons hired; the area of expertise of each; the payments made to each person and company in addition to the timeframe of each individual contract, in tabular form; and if he will make a statement on the matter. [24100/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 180 to 182, inclusive, together.

In February 2013 Kieran Wallace and Eamonn Richardson of KPMG were appointed by me in my role as Minister for Finance as Special Liquidators of IBRC and were tasked with managing the winding-up of the institution, this process is on-going. The Special Liquidators are obliged to comply with the instructions given to them by the Minister for Finance and act in the interests of the taxpayer under the provisions of the IBRC Act.

I would like to draw the Deputy's attention to the most recent progress update report on the Special Liquidation of IBRC which was published on 5th May 2017 and which is available on the Department of Finance website (http://www.finance.gov.ie/sites/default/files/170505%20IBRC%20Progress%20update%20report%20report_31%20Dec%2016.pdf). While the Special Liquidators are not obliged to go through a procurement process when appointing firms to assist in the wind-up of IBRC, Page 45 of the latest progress update report details the cost management undertaken by the Special Liquidators. These are the various steps which the Special Liquidators take/have taken when hiring legal and third party advisors/contractors to ensure costs are minimised and are managed efficiently and effectively while continuing to ensure the orderly wind-up of IBRC. 

The costs associated with the Special Liquidation of IBRC from 7th February 2013 to 31st December 2016 are €214.581m. Of this, €127.666m relates to fees for work carried out by the KPMG Special Liquidation team and KPMG migration team, €34.428m relates to legal work carried out by A&L Goodbody solicitors, and €19.694m relates to legal work carried out by Linklaters. There were other professional advisors costs that amounted to €18.017m and other legal advisors costs were €14.778m. The total costs for the 12 months to 31st December 2016 amounted to €35.059m. Page 39 of this report outlines the costs associated with the Special Liquidation of IBRC in more detail. The report also sets out in more detail the roles of the key advisors to the Special Liquidators.

Mortgage Lending

Questions (183)

Clare Daly

Question:

183. Deputy Clare Daly asked the Minister for Finance if those whose mortgages were sold to foreign owned vehicles will now be entitled, as per the code of practice on the transfer of mortgages, to know the length of time the firm has been in business and in operation and the name of the ultimate holding company, with reference to the Fourth Anti-Money Laundering Directive, AMLD4; and if he will make a statement on the matter. [24088/17]

Written answers

Minister for Finance

The Central Bank has advised me that where mortgage credit providers choose to adhere to the Code of Practice on the transfer of mortgages, they may provide borrowers with a range of information relating to a proposal to transfer their mortgages to another lender. Such information could include:

- the name and address of the intended transferee;

- the relationship, between the mortgage lender and the transferee;

- information on the intended transferee's time in operation and experience in managing mortgages, of how rates will be set and of how repayments will be made.

As the referenced 1991 Code of Practice is voluntary, it does not have a legislative basis and is not subject to the Central Bank of Ireland’s administrative sanctions process. 

In contrast, I have been informed by the Central Bank that provision 3.11 of the more recent Consumer Protection Code (the “Code”) dictates what should occur in terms of information to consumers when loans are transferred. This provision states that where a regulated entity transfers all or part of its regulated activities to another regulated entity, a number of requirements arise, one of which is to inform affected consumers.

When a loan book is transferred, the consumer must be informed of this change in ownership as the regulated activity of 'credit servicing' will usually transfer to another credit servicing firm. Where the transferee is an unregulated entity, the Code also requires that the regulated lender also notify the consumer of the regulated entity that will be ‘servicing’ the loan for the unregulated entity.

It is also important to highlight that the transfer 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.

Finally, it should be noted that the 4th Anti-Money Laundering Directive (4AMLD) requires Member States to ensure that corporate and other legal entities incorporated within their territory obtain and hold adequate, accurate and current information on their beneficial ownership, including details of the beneficial interests held. It also requires the above mentioned entities to transmit their beneficial ownership information to a central register.

Establishing a central register of beneficial ownership will not alter any practices that mortgage credit providers have voluntarily adopted under the 1991 Code of Practice on the Transfer of Mortgages ("Code of Practice").

Insurance Industry

Questions (184)

David Cullinane

Question:

184. Deputy David Cullinane asked the Minister for Finance the status of recent developments regarding insurance claimants of a company (details supplied); and if he will make a statement on the matter. [24126/17]

Written answers

Minister for Finance

Setanta Insurance was placed into liquidation by the Malta Financial Services Authority in April 2014 and this liquidation is being carried out under Maltese law.  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 focus of the court action is to determine whether it is the Insurance Compensation Fund (ICF) or the MIBI which is responsible for the payment of third party claims. 

The Supreme Court heard the case in October 2016.  The judgment in that case is due to be delivered on 25 May 2017. 

I hope to be in a position to provide a more detailed update after the legal proceedings are concluded.  However, it should be noted that there will not be an overnight resolution of the situation as claims will have to be verified and processed before payments can be made by the party deemed liable. This will be required whether by MIBI if the decision is upheld, or the Insurance Compensation Fund (ICF) if it is overturned. 

It should be noted that first party claims, which are not affected by the court action, are being processed by the Office of the Accountant of the Courts of Justice through the ICF.

Living City Initiative

Questions (185)

Fergus O'Dowd

Question:

185. Deputy Fergus O'Dowd asked the Minister for Finance if he will extend the living city initiative to Drogheda and Dundalk; and if he will make a statement on the matter. [24147/17]

Written answers

Minister for Finance

As the Deputy will be aware, the Living City Initiative was enacted in the Finance Act 2013 and commenced on 5th May 2015. The Initiative was extended beyond the original planned pilot cities of Limerick and Waterford, to include the cities of Dublin, Cork, Galway and Kilkenny. In line with my Department's commitment to evidence based policy-making, the inclusion of these additional four cities followed the completion of a comprehensive, independent ex-ante cost benefit analysis.

As I advised the Deputy last year, to date, take-up of the scheme has been lower than anticipated. A review was undertaken last year by my officials and this was published in the Report on Tax Expenditures (October 2016) that was released on Budget Day.

In light of the findings in the report, and in consultation with the relevant councils and the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs, I announced a number of changes to the scheme in Budget 2017 to make the scheme more attractive and effective. The aim is to get the design of the initiative right and working in an effective manner. It is important that the underpinning scheme is made more effective, as until that has been achieved, extension of eligibility for it to other towns or cities would be largely meaningless. Accordingly,  I do not currently propose to extend the scheme beyond the present locations.

Central Bank of Ireland Staff

Questions (186)

Aindrias Moynihan

Question:

186. Deputy Aindrias Moynihan asked the Minister for Finance the number of persons employed by the Central Bank. [24157/17]

Written answers

Minister for Finance

I am informed by the Central Bank that the total headcount as at end December 2016 was 1,599 full time equivalents, against an approved complement of 1,695.

The Bank is engaged in recruitment on an on-going basis and the Governor has previously indicated that the Bank has the ability to effectively re-prioritise where it needs to. 

I am satisfied that the Bank has the necessary resources to fulfil its mandate.

Central Bank of Ireland

Questions (187)

Aindrias Moynihan

Question:

187. Deputy Aindrias Moynihan asked the Minister for Finance the operational cost of the Central Bank in 2015. [24158/17]

Written answers

Minister for Finance

The Central Bank's total operating cost for 2015 was €230.3 million.

Full details of operating expenses can be found in the Central Bank's Annual Report 2015, available at the following link: https://www.centralbank.ie/docs/default-source/publications/annual-reports/2015-central-bank-annual-report.pdf?sfvrsn=6

Banking Sector Data

Questions (188)

Aindrias Moynihan

Question:

188. Deputy Aindrias Moynihan asked the Minister for Finance the amount of revenue earned by domestic banks in 2015. [24159/17]

Written answers

Minister for Finance

I have no role in terms of the total amount of revenue earned by the domestic banks. The information in question should be available from the published accounts of the banks in question.

Banking Sector Data

Questions (189, 190)

Aindrias Moynihan

Question:

189. Deputy Aindrias Moynihan asked the Minister for Finance the amount of revenue earned by a bank (details supplied) in 2015; and the amount earned in its main sectorial components, for example house mortgages, current account charges, SME funding and other main loan types. [24160/17]

Aindrias Moynihan

Question:

190. Deputy Aindrias Moynihan asked the Minister for Finance the gross profit earned by a bank (detail supplied) in 2015 and in each of its main sectorial components. [24161/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 189 and 190 together.

In 2015 AIB reported a Profit Before Tax of €1,914 million.

Net Interest Income was €1,927 million, Other Income (which would include fees) was €696 million while total costs were €1,296 million. The bank also reported a credit provision write-back of €923 million in 2015.

Gross Loans to Customers at year-end 2015 amounted to €70,163 million and the following table shows a breakdown of the type of loans held:

€ million	Ireland	UK	Group & International	Total
Residential Mortgages	34,456	2,362	-	36,818
of which: Owner-Occupier	28,880	2,048	-	30,928
of which: Buy-To-Let	5,576	314	-	5,890
Other Personal	3,156	356	-	3,512
Property & Construction	8,055	3,443	34	11,532
Non-Property Business Lending	10,223	5,292	2,786	18,301
Total	55,890	11,453	2,820	70,163

The Deputy will find publicly disclosed financial information for AIB in the institution's annual reports and results presentations. AIB's 'Results Centre' and the documents for 2015 can be found on the company's website here: https://aib.ie/investorrelations/financial-information/results-centre/2015

Insurance Industry

Questions (191)

Maureen O'Sullivan

Question:

191. Deputy Maureen O'Sullivan asked the Minister for Finance if his attention has been drawn to allegations of aggressive behaviour by a company (details supplied) and its refusal to comply with disability discrimination legislation as it seeks to deny a person the benefit of house insurance; the action he will take to counter the allegedly aggressive policies; whether such companies should facilitate the needs of the disabled; and if he will consider measures to discourage aggressive behaviour by loss adjusters and insurers. [24238/17]

Written answers

Minister for Finance

As Minister for Finance, I have responsibility for the development of the legal framework governing financial regulation in Ireland, including the regulatory environment for life and non-life insurance.  The legal and regulatory framework for the provision of life insurance, non-life insurance and reinsurance in the European Economic Area (EEA), and the supervision of that activity, is prescribed by EU Directives.  Insurance companies that operate in this jurisdiction must therefore operate under those requirements.   Consequently, it would not be appropriate for me to provide a comment in relation to the insurance company in question.  It should also be noted that requirements set out under equality legislation are a matter for my colleague, the Tánaiste and Minister for Justice and Equality.

By way of further information, I have no role in day to day supervision of the insurance industry, as this is the responsibility of the Central Bank of Ireland.  In that regard, the Central Bank of Ireland has two specific mandates as regards insurance supervision.  Firstly, it is responsible for the prudential supervision of insurance companies it has authorised by seeking to ensure that such firms remain solvent.  Secondly, the Central Bank of Ireland is responsible for the supervision of conduct of business in Ireland, also referred to as consumer protection.

In relation to your question,  the Central Bank has informed me that Section 3.1 of the Consumer Protection Code states that; “Where a regulated entity has identified that a personal consumer is a vulnerable consumer, the regulated entity must ensure that the vulnerable consumer is provided with such reasonable arrangements and/or assistance that may be necessary to facilitate him or her in his or her dealings with the regulated entity.” It defines a vulnerable customer as follows:  A “vulnerable consumer” means a natural person who:

a) has the capacity to make his or her own decisions but who, because of individual circumstances, may require assistance to do so (for example, hearing impaired or visually impaired persons); and/or

b) has limited capacity to make his or her own decisions and who requires assistance to do so (for example, persons with intellectual disabilities or mental health difficulties).

You should also be aware that with regard to the pricing and provision of insurance in general, insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply.  My understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurance companies will price in accordance with their own past claims experience.  

Finally, the Deputy should note that Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance.  Insurance Ireland can be contacted at [e-mail] or 01-6761914.

Banking Sector

Questions (192)

Michael McGrath

Question:

192. Deputy Michael McGrath asked the Minister for Finance if he will address a matter raised in correspondence (details supplied) on the possible initial public offering of a bank. [24280/17]

Written answers

Minister for Finance

The 2015 capital reorganisation at AIB resulted in a number of changes to the shareholding structure. Principal among these was the consolidation of shares as well as the redemption and conversion of the State’s Preference Shares. As you know, AIB had in excess of 523 billion Ordinary Shares in issue (increasing to around 678 billion as a result of the conversion) which was extraordinarily high for a public company.

All shareholders on the register of members of AIB as at the ‘Ordinary Share Consolidation Record Time’ received one New Ordinary Share for every 250 Ordinary Shares held, rounding up where the number of shares owned was not divisible by 250. The Ordinary Share Consolidation assisted in reducing AIB’s share price volatility and brought the bank’s share count back to levels more typical of a stable corporate entity. The Ordinary Share Consolidation was structured so that it did not result in the removal of any shareholder from the register of members of AIB and the rounding up process ensured that no shareholder was disadvantaged.

The part conversion of Preference Shares into equity had the effect of diluting other holders of Ordinary Shares, such that their stake in AIB was reduced. The State acquired its new ordinary shares at the estimated fair market value of AIB at the time. The conversion price (pre-consolidation) was set at 1.7c per share which was agreed as fair and reasonable by the Board of AIB having consulted with their ESM advisor. All shareholders in the bank were asked to vote on the proposed transaction at the EGM on the 16th December 2015. As you will recall, most of the value of AIB's shares was wiped out during the financial crisis, when the State was required to intervene to rescue the bank.

As part of the preparation for a potential IPO of AIB, I am planning to include an offering to retail investors. The structure of the retail element will be informed by previous privatisations and the changes in the regulatory environment for retail investors in recent years. As such, there will be no active marketing of the shares and the minimum required order size will be €10,000. Eligible retail investors will be able to purchase shares on exactly the same terms as institutional investors. My Department will provide more information on what private investors will need to do to participate in the retail offer at the appropriate time.

Finally I would strongly encourage any prospective retail investors to take appropriate independent financial advice before making any investment decision given the risks associated with investing in an equity instrument.

Insurance Coverage

Questions (193)

Michael Healy-Rae

Question:

193. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding no claims bonuses for returning emigrants; and if he will make a statement on the matter. [24294/17]

Written answers

Minister for Finance

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.  Consequently, I am not in a position to direct insurance companies as to the pricing level that they should apply to particular categories of individuals.  

Furthermore, I am advised that insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply.  These terms can include the type and age of car, as well as the age, driving experience, claims record and penalty points of the driver, the number of drivers, how the car is used, etc.  My understanding is that insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market.  In addition, insurance companies will price in accordance with their own past claims experience.  

Notwithstanding the above, I am aware of the matter raised by the Deputy and I accept that it is possible for the State to play a role in helping to stabilise the market and deal with factors contributing to the cost of insurance.  Consequently, I established the Cost of Insurance Working Group and appointed Minister of State Eoghan Murphy as Chair.  The Report on the Cost of Motor Insurance was published in January 2017.  It contains 33 recommendations and 71 actions which are detailed in an action plan contained in the Report with agreed timelines for implementation.  

Recommendation 6 of the Report, in particular, aims to address the problems faced by returning emigrants regarding the recognition of no claims bonuses through the introduction of a standard protocol for insurance providers, to ensure a greater consistency of treatment for returning emigrants.  This is required to be in place by the end of 2017.

Also the Deputy should note that by Q2 2017, insurers are being asked to implement procedures when pricing a policy to enable the acceptance of driver experience from abroad when a person has previous driving experience in Ireland and is coming from a country that drives on the left side of road. By Q4 2017, insurers are being asked to implement a similar procedure in relation to experience gained in a country that drives on the right hand side of the road. Insurance Ireland will submit a report to my Department on the implementation of these procedures in Q2 and Q4 2017.

Company Liquidations

Questions (194)

Michael McGrath

Question:

194. Deputy Michael McGrath asked the Minister for Finance the status of the liquidation of a company (details supplied); the number of Irish policyholders affected; the amount of compensation or refunds owed to customers here; if the liquidator has updated the Central Bank on the situation; if customers here are likely to be paid in full or partially; and if he will make a statement on the matter. [24453/17]

Written answers

Minister for Finance

Enterprise 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.  

The Gibraltar Financial Services Commission has provided the Department of Finance officials with the following up-to-date information:

- The Liquidator has appointed Wrightway Underwriting Ltd to manage claims arising under insurance policies written by Enterprise in Ireland.  Claims adjudicated upon and validated will be accepted by the Liquidator as insurance creditors in the Enterprise estate.

- The latest information indicates that there are 230 live claims from Irish policyholders arising from the motor insurance business with an estimated claims reserve value of €8.4 million.

- The Liquidator and his agents have been in contact with the Supervision Division of the Central Bank of Ireland.

- The Liquidator is unable to estimate at this time the timing or amount of any distribution he may be able to make to insurance creditors. 

It is understood that the Liquidator is unlikely to be able to meet the claims in full.  The question, then arises as to how any shortfall will be met and whether it will be met in full. In this regard, a clearer picture will emerge when the Setanta judgment is announced on 25 May. Should the High Court ruling be 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.? However, if the Court rules that the Insurance Compensation Fund (ICF) is liable then the payments are subject to a limit of 65% of the amount due or €825,000, whichever is the lesser.

Employment Data

Questions (195)

Peadar Tóibín

Question:

195. Deputy Peadar Tóibín asked the Minister for Finance the numbers of live PAYE taxpayers who are registered with the Revenue Commissioners, that is, PAYE taxpayers who are not designated as deceased, unemployed or emigrated and if he will compare this figure with the number of persons at work that are understood by the CSO to be PAYE workers. [24573/17]

Written answers

Minister for Finance

I am advised by Revenue Commissioners that, at end 2016, there were around 2,375,600 live PAYE employees on Revenue records. This includes cases earning but not in the tax net. It should be noted that PAYE employments on Revenue records also include retired persons in receipt of private or occupational pensions.

Comparison between Revenue and CSO figures are not straightforward for a number of reasons. Revenue figures are based on the population of taxpayers filing returns (or for whom returns are filed on their behalf by employers), while CSO data primarily rely on statistical surveys. In addition, Revenue data record tax units (married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one tax unit) rather than individuals.

The following table sets out the number of tax units considered to be either PAYE, self employed or ‘mixed’ (with incomes from both employment and self employment) on Revenue records for 2014 (the latest year for which complete data are available).

Year	PAYE	Self Employed	Mixed
2014	1,704,310	188,799	330,939

For the same year, the CSO Quarterly national household survey (QNHS) indicates 1,605,500 million persons aged over 15s in employment and 320,200 in self employment. As noted for the reasons above, the figures are not expected to match exactly.

Mortgage to Rent Scheme Funding

Questions (196)

Michael McGrath

Question:

196. Deputy Michael McGrath asked the Minister for Finance if the purchase by the State in the form of a special purpose vehicle, SPV, or other such wholly owned State instrument, of distressed principal private dwelling mortgages to facilitate the roll-out of a mortgage to rent scheme on a grand scale would likely constitute an on-balance sheet or off-balance sheet transaction in terms of the Government accounts; if such a purchase would be regarded as capital or current expenditure in terms of the domestic and EU fiscal rules; and if he will make a statement on the matter. [24649/17]

Written answers

Minister for Finance

At a national level, the Central Statistics Office is responsible under EU regulation for ensuring that all units within the economy are classified according to the rules set out under the European System of Accounts 2010 (ESA 2010). Eurostat is the ultimate arbiter on classification decisions under ESA 2010. Classifications are determined on a case by case basis and a great deal of information is required for the consideration of each case.

However, at a general level, I can inform the Deputy that Special Purpose Vehicles (SPVs) set up by government are covered in ESA 2010. The framework specifies that “…such units, if they are resident, shall be treated as an integral part of the general government and not as separate units". Notwithstanding this, ESA 2010 does envisage circumstances under which a SPV can be recorded as a separate unit outside general government. The key requirement is that the SPV does not act on behalf of government. This means that it can to a great extent decide e.g. on the type and maturity of instruments to be issued, the management of the debt and/or the assets to be acquired. Management of the assets, including disposal, would also have to be left to the SPV's discretion.

Finally, in order to classify such expenditure as capital or current, further information would be required on the specific nature of the transaction.

Help-To-Buy Scheme Eligibility

Questions (197)

Jan O'Sullivan

Question:

197. Deputy Jan O'Sullivan asked the Minister for Finance if a person who was part-owner of a family home prior to separation and transferred their share to their spouse on separation can qualify for the help-to-buy scheme as a first-time buyer; and if he will make a statement on the matter. [24747/17]

Written answers

Minister for Finance

The “Help to Buy” scheme is provided for in section 477C of the Taxes Consolidation Act 1997. The section provides that, in order to qualify for the scheme a first-time purchaser must be “an individual who, at the time of a claim - has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling”.

I am advised by Revenue that as the Deputy’s question relates to a person who was part owner of a family home prior to separation, the person does not appear to satisfy the requirements of a first-time purchaser under the scheme. However, it is not clear from the Deputy's question as to whether the individual in question purchased or built the property that was subsequently transferred. If the Deputy would like to provide further details of the case I can forward them to Revenue for direct reply.