Written Answers Nos. 97-116
97. Deputy Denise Mitchell asked the Minister for Finance the work being undertaken in respect of addressing anomalies in food and drink VAT rates as part of deliberations on upcoming changes to VAT law at EU level; and if he will make a statement on the matter. [11554/19]
View answer98. Deputy Denise Mitchell asked the Minister for Finance if he will consider the inclusion of a nutrient profiling model to identify unhealthy food products as part of the applicability of VAT on food and drink; and if he will make a statement on the matter. [11555/19]
View answerI propose to take Questions Nos. 97 and 98 together.
VAT is governed by the EU VAT Directive, with which Irish VAT law must comply. The VAT treatment of food and drink in Ireland is varied and has developed over time. Most basic foods apply at the zero rate under an historical derogation from the normal VAT rules. Catered food primarily applies at the 13.5% reduced rate, including hot beverages. Most drinks apply at the standard VAT rate, including alcohol, soft drinks, bottled water and fruit juices.
VAT rates are reviewed annually in the context of the Budget and Finance Bill cycle. However, any changes to VAT rating are restricted by EU VAT rules. If the VAT rate on food or drink that currently applies at the zero rate were to be increased, it would not be possible to return that food or drink to the zero rate at a later date. In addition, it is not possible to apply the zero rate to any new food or drink that has not applied at that rate on and from 1 January 1991.
The European Commission published a proposal in January 2018 which aims to simplify VAT rating, allowing Member States greater freedom in setting VAT rates. The proposal has not yet progressed at EU Council. It is expected that discussions on the proposal will be robust and will provide for an opportunity to undertake a fuller examination of the VAT rates in general, including those applicable to food and drink.
Separate from the EU policy on VAT rating, one of the main principles of EU VAT law is fiscal neutrality, which provides that different VAT rates cannot apply to goods that are considered the same. For example, it is not possible to apply different VAT rates to restaurant services based on the nutritional value of the food being served.
EU VAT rules also dictate that a Member State can only apply a limited number of VAT rates, which would similarly be the case under the Commission's revised system. As such, any determination in respect of categories of foods would have to be limited to the available number of VAT rates, while also considering any additional complexity and administrative burden that could be generated, both for business and tax administrations.
99. Deputy Charlie McConalogue asked the Minister for Finance his plans to increase the threshold band of inheritance tax payable for nieces and nephews in view of the high rate of tax that they are liable to pay on current thresholds; if investigations have been carried out on the implications of potential amendments to the thresholds; and if he will make a statement on the matter. [11575/19]
View answerAs the Deputy is aware, there are, in all, three separate lifetime CAT Group thresholds based on the relationship of the beneficiary to the disponer.
I would say that there have been changes to the three threholds in recent times. In Budget 2017, the Group A threshold which generally applies to gifts to or ineritances by children, adopted children and some foster children, was increased from €280,000 to €310,000 and in Budget 2019 was increased to €320,000. The Group B threshold, which generally applies to gifts to or inheritances by nephews, nieces, brothers, sisters and which is the subject of the Deputy's question, was increased in Budget 2017 from €30,150 to €32,000. In additon the Category C threshold which applies to all other categories was increased from €15,075 to €16,250. These changes have been introduced where resources allow and in light of competing priorities.
I would add that in relation to the threshold for nieces/nephews (Group B), there is a specific relief from CAT available in certain circumstances, known as the CAT favourite niece or nephew relief. This applies to the inheritance of business or agricultural property where certain conditions are met. Where the niece or nephew has worked substantially on a full-time basis for 5 years prior to inheritance, they are entitled to the Group A tax-free threshold of €320,000 when calculating their CAT liability for the inheritance, rather than the Group B threshold (currently €32,500). In order to qualify for this relief, the nephew/niece must work for the disponer for a minimum number of hours per week (either 15 or 24, depending on the size of the business/farm).
The aim of this relief is to target nieces/nephews who have placed their labour and expertise at the disposal of the disponer for an ongoing period, to the benefit of the business. This relief applies to all businesses, including farming.
Consideration of possible changes to CAT rates and thresholds, including in respect of inheritances or gifts to nephews and nieces generally takes place as part of the annual Budget and Finance Bill process.
100. Deputy Michael McGrath asked the Minister for Finance the amount paid by policy holders by way of insurance premiums in each of the years since 2010 in respect of class 1 business motor insurance in tabular form; and if he will make a statement on the matter. [11637/19]
View answer101. Deputy Michael McGrath asked the Minister for Finance the amount paid by policy holders by way of insurance premiums in each of the years since 2010 in respect of class 2 business motor insurance in tabular form; and if he will make a statement on the matter. [11638/19]
View answerI propose to take Questions Nos. 100 and 101 together.
As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. My Department does not collect the type of information being sought by the Deputy. As the day to day supervision of insurance undertakings is a matter for the Central Bank of Ireland, my officials consulted with the Central Bank in respect of the information sought and it has confirmed that it does not collect this information either.
I would note that initially at least this type of information will not be collected by the National Claims Information Database as its focus in the first instance will be on private motor insurance claims. However, I recognise that there is a view from some stakeholders that it would be desirable to expand its scope to other lines of business, such as commercial motor insurance. For this reason, the Central Bank (National Claims Information Database) Act 2018 facilitates the expansion at a later stage should it be considered feasible.
I understand that Insurance Ireland publishes some information in relation to the gross written premium for commercial motor insurance, however this is not split into class 1 and class 2 In that regard, I understand, from the 2016 Insurance Factfile that €444.6 million was the gross written premium for commercial motor insurance. This represents approximately 26% of the overall gross written premium for motor insurance. The corresponding gross written premium figures for private motor insurance were €1.2 billion, which represents 74% of the overall gross written premium. The Deputy will be able to find similar information for years prior to this in previous year’s Insurance Factfiles on Insurance Ireland’s website.
102. Deputy Michael McGrath asked the Minister for Finance the amount paid by policy holders by way of insurance premiums in each of the years since 2010 in respect of motor insurance for returning emigrants in tabular form; and if he will make a statement on the matter. [11639/19]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. My Department does not collect the type of information being sought by the Deputy. As the day to day supervision of insurance undertakings is a matter for the Central Bank of Ireland, my officials consulted with the Bank in respect of the information sought and it has confirmed that it does not collect this information either.
With regard to the cost of insurance for returning emigrants, it is important to note that 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 or terms or conditions that they should apply in respect of particular categories of drivers or vehicles.
Notwithstanding this, the difficulties faced by returning emigrants in respect of motor insurance recognised by the Cost of Insurance Working Group’s Motor report. In this regard, the Deputy may be aware that in fulfilment of one of the Working Group’s recommendations, a protocol was agreed between Insurance Ireland and the Department of Finance under which insurance companies committed to accepting the driving experience returning emigrants gained while abroad, when the driver has had previous driving experience in Ireland.
The guiding principle of the protocol is to ensure that a returning emigrant is not treated differently to any other driver, subject to verification of their continued driving experience and the normal acceptance criteria of the company. Thus, a returning emigrant will not be disadvantaged from spending that time abroad. Furthermore, under the protocol, insurance companies will not distinguish between countries on the basis of which side of the road driving takes place therein.
The Minister for the Diaspora and International Development, Mr Ciarán Cannon TD, has undertaken some further work in this area, through the Interdepartmental Committee on the Irish Abroad. This has included highlighting each individual motor insurance operator’s overall policy in respect of returning emigrants. The insurers which responded positively in relation to providing cover for this category are listed on the Department of Foreign Affairs and Trade website. These insurers have also indicated that they do, in one way or another, take into account claims-free driving experience earned abroad.
It is important to highlight that if a returning emigrant believes that they have received a high quote due to an insurance provider not accepting driving experience gained while abroad, they should contact the free Insurance Information Service operated by Insurance Ireland, which can be accessed at feedback@insuranceireland.eu or 01-6761820.
Finally, I remain of the view that the continued implementation of all the recommendations from the Report on the Cost of Motor Insurance – in addition to those in the CIWG’s Report on the Cost of Employer and Public Liability Insurance and the two reports of the Personal Injuries Commission – should achieve the objectives of delivering fairer premiums for consumers and a more stable and competitive insurance market.
In this regard, it should be noted that the CSO CPI statistics indicate that pricing in the private motor insurance market has stabilised over the last year or two and I welcome the direction of travel which this index has displayed since it peaked in July 2016.
103. Deputy Michael McGrath asked the Minister for Finance the amount paid by policy holders by way of insurance premiums in each of the years since 2010 in respect of motor insurance for cars that are ten years or older in tabular form; and if he will make a statement on the matter. [11640/19]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. My Department does not collect the type of information being sought by the Deputy. As the day to day supervision of insurance undertakings is a matter for the Central Bank of Ireland, my officials have consulted with the Central Bank in respect of the information sought and it has confirmed that it does not collect this information either.
With regard to the cost of insurance for cars over 10 years old, it is important to note that 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 or terms or conditions that they should apply in respect of particular categories of vehicles.
Notwithstanding this, my officials engaged with Insurance Ireland in order to get a greater sense of this specific issue and, as a follow-up exercise, Minister of State D'Arcy held a series of meetings with the Chief Executives of the major motor insurers. At those meetings, insurers pointed out that in making their individual decisions on whether to offer cover and what terms to apply, they will, aside from the age of the vehicle, use a combination of other rating factors, which include the age of the driver, the type of vehicle, the relevant individual claims record and driving experience, the number of drivers, and how the car is used. In addition to the above factors, they indicated that they will price in accordance with their own overall past claims experience and in this regard, almost all insurers stated that their data indicates a notable deterioration in the levels of claims associated with vehicles once a certain age threshold is reached.
However, I also understand from the above engagement that it would appear there has been positive movement in respect of the acceptance criteria and the vehicle age threshold levels used by some providers in recent times, particularly at broker level and in respect of renewals. This is an issue which my officials will continue to monitor.
It is important to highlight that if a person is having difficulty securing a quotation or believes that they have received a high quotation as a result of having a car older than 10 years old, they should contact the free Insurance Information Service operated by Insurance Ireland, which can be accessed at feedback@insuranceireland.eu or 01-6761820.
Finally, I am hopeful that the continued implementation of all the recommendations from the Report on the Cost of Motor Insurance – in addition to those in the CIWG’s Report on the Cost of Employer and Public Liability Insurance and the two reports of the Personal Injuries Commission – should achieve the objectives of delivering fairer premiums for consumers and a more stable and competitive insurance market.
104. Deputy Mattie McGrath asked the Minister for Finance if banks are required to offer customers in mortgage distress the option of applying for the mortgage to rent scheme; and if he will make a statement on the matter. [11668/19]
View answerI am advised by the Central Bank of Ireland that within the remit of their responsibilities for safeguarding stability and protecting consumers, its approach to mortgage arrears resolution is focused on ensuring the fair treatment of borrowers through a strong consumer protection framework and ensuring that lenders have appropriate arrears resolution strategies and operations in place.
The Code of Conduct on Mortgage Arrears (CCMA) forms part of the Central Bank’s Consumer Protection Framework. It is a statutory Code first introduced by the Central Bank in February 2009, with the current CCMA becoming effective from 1 July 2013. The CCMA provides a strong consumer protection framework, aimed specifically at the process to be followed by relevant firms, to ensure borrowers in arrears or pre-arrears in respect of a mortgage loan secured on a primary residence are treated in a timely, transparent and fair manner.
Banks, retail credit firms and credit servicing firms are all required to comply with the CCMA. The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears, and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. It sets out the Mortgage Arrears Resolution Process (MARP), a four-step process that regulated entities must follow:
Step 1: Communicate with borrower;
Step 2: Gather financial information;
Step 3: Assess the borrower’s circumstances; and
Step 4: Propose a resolution
Each regulated entity must consider the borrower’s situation in the context of the solutions that they offer, which may differ from firm to firm. The CCMA does not prescribe the solution which must be offered and lenders are not required to offer a particular solution to a borrower.
The CCMA also provides that a lender must prepare and make available to borrowers, an information booklet providing details of its MARP, which must include an explanation of all ARAs available from that lender and any other options offered by the lender (other than alternative repayment arrangements), such as mortgage to rent, voluntary surrender, voluntary sale, and trading down, and a statement that the availability of these options are subject to an individual assessment of each case and meeting the lender’s (or a third party’s) criteria.
The CCMA also sets out a procedure that lenders must follow where the following circumstances arise:
- where a lender classified a borrower as not co-operating (provision 29), or
- where a lender concludes that an alternative repayment arrangement is unlikely to be appropriate (provision 45), or
- where a borrower is not willing to enter into an alternative repayment arrangement offered by the lender (provision 47)
Again, the procedure to be followed by the lender in any of these circumstances is that it must inform the borrower on paper or another durable medium of other options available to the borrower, such as mortgage to rent, voluntary surrender, trading down, or voluntary sale, and the implications of these for the borrower and the borrower’s mortgage loan account.
105. Deputy Pearse Doherty asked the Minister for Finance the EU contributions to be made by Ireland in each of the next five years; the estimated figure if the contributions were based on best forecasts; and if he will make a statement on the matter. [11678/19]
View answerFor the years 2020 to 2023, as part of Budget 2019, my Department has forecasted contributions of €2.9bn, €3.1bn, €3.2bn and €3.4bn respectively. Further to this, for the year 2024, my Department has forecasted a contribution of €3.5bn. As part of the Stability Programme Update, these forecasts will be updated in the coming weeks. However, it is worth noting that these forecasts are contingent on a number of variables, including updated GNI forecasts, the size of the overall EU budget for the year and other EU budget operational developments. As a result, all forecasts will be monitored and updated on an ongoing basis.
It should be noted that forecasts for the years 2021 onwards are based on the Commission’s proposal for the next MFF which allows for Brexit with Own Resources based on the remaining 27 Member States only. Under the Withdrawal Agreement between the EU and UK, the UK had agreed to continue to pay into the EU budget for the remaining years of the current MFF, as if it was still a member. If adopted this would result in no additional impact on Ireland’s contributions or receipts up to the end of the current MFF in 2020.
106. Deputy Pearse Doherty asked the Minister for Finance when persons (details supplied) will receive the remaining 35% of their entitlements following the collapse of a company; and if he will make a statement on the matter. [11701/19]
View answerSetanta Insurance ("Setanta") was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. As it was a Maltese incorporated company, the liquidation is being carried out under Maltese law.
The Deputy will be aware that the Insurance (Amendment) Act 2018 (Act 21 of 2018) was enacted in July 2018. The Act inter alia provides for revised arrangements for the on-going administration of the Insurance Compensation Fund ("ICF"), including for the relevant applications to the President of the High Court. The most recent tranche of payments to Setanta claimants took place in late November 2018.
To date, 670 personal injury claimants have been compensated in full. The liquidator of Setanta has informed me that since the last application was submitted, a further 125 personal injury claimants have now been agreed and these will be included in the next submission to the Fund bringing the total number of personal injury claimants who have agreed settlements to 795. There are a further 411 personal injury claimants who have yet to settle their claims. The latest information from the liquidator estimates that the total value of the next tranche will be approximately €7 million.
Currently, no date has yet been fixed for the presentation of the next tranche of payments to the High Court. However, my officials have confirmed with the State Claims Agency that the preparatory work is ongoing with a view to arranging a court date later this month which will allow payments to issue by early April.
While I cannot comment on individual cases, the State Claims Agency has also advised that, to their knowledge, any claimant who was due the residual/balancing 35% of their Setanta settlement was included in the last application to the ICF and the relevant cheques issued late last year. Any person expecting such a payment but who hasn’t received it should make contact with their own solicitor to establish why they haven’t received the payment. If their solicitor similarly hasn’t received the payment, he/she should contact the solicitor firm that represented Setanta on the claim.
Finally, it should be noted that the process of settling claims is still ongoing and is subject in some cases to court procedures. The liquidator of Setanta estimates that the process of settling the vast majority of these outstanding claims should be completed by end-2019.
107. Deputy Noel Grealish asked the Minister for Finance his views on a derogation in the proposed transposition process of IORP II for small single-member pension schemes as was provided in the previous directive on this issue; and if he will make a statement on the matter. [11769/19]
View answerAs Minister for Finance, my Department's role in relation to pensions policy primarily relates to the use of tax policy to incentivise retirement savings. In addition, I have responsibility for overall macroeconomic policy and fiscal sustainability. I think it's important to point out that individuals are incentivised to save for retirement through tax policy measures. The Taxes Consolidation Act 1997 provides that the investment income and gains of pension schemes and pension saving arrangements, approved by the Revenue Commissioners, are generally exempt from taxation while they remain in the scheme or arrangement. This tax exempt treatment of investment growth together with the exemption from tax on ongoing contributions paid into pension funds are intended to encourage individuals to provide themselves with an adequate income in retirement.
In relation to the transposition of the Directive (EU) 2016/2341, on the activities and supervision of institutions for occupational retirement provision (IORPs), also known as IORP II, the Deputy is probably aware that this matter is a policy matter for the Minister for Employment Affairs and Social Protection and her Department.
Many of the provisions being implemented by IORP II will support positive reform of the Irish occupational pension sector with aims to ensure good governance, the provision of information to scheme members and the transparency and safety of occupational retirement provision. Given the level of incentives available and the importance of individuals having sufficient savings to adequately provide for their retirement, I believe it's imperative that all pension schemes are subject to sound protections for pensions and consumers, to ensure that money saved for pension purposes is properly protected.
I am aware on implementation of IORP II, that single member schemes, including Small Self-Administered Pension Schemes (SSAPS), previously outside of the scope of the investment and borrowing IORP I provisions, will be subject to IORP II provisions. I have been informed by DEASP that the application of the Directive is not retrospective, but prospective, so those changes will not affect existing investments and borrowings by schemes. However, from transposition onwards, single member schemes will no longer be permitted to enter into new borrowing agreements, except for short term and liquidity purposes, and all future investments will have to be carried out in accordance with the Directive rules.
Finally, I am supportive of the principle of improved regulation and consumer protection for pension savers as reflected in IORP II. Also, given that the State incentivises pension savings, I believe it is appropriate that limits are placed on the nature and riskiness of assets held by pension savers.
108. Deputy Michael McGrath asked the Minister for Finance the views of the Central Bank on potentially expanding the Rebuilding Ireland home loan scheme; if he requested the Central Bank to provide a formal opinion on the scheme; if so, the details of the opinion; and if he will make a statement on the matter. [11790/19]
View answer116. Deputy Jan O'Sullivan asked the Minister for Finance if he has been in contact with the Central Bank about a review of the funding and-or the interest rate of the Rebuilding Ireland home loan scheme; and if he will make a statement on the matter. [12331/19]
View answerI propose to take Questions Nos. 108 and 116 together.
I understand the Department of Housing, Planning and Local Government is presently carrying out an internal review of the Rebuilding Ireland Home Loan scheme. As part of this review there are discussions ongoing between the Department of Housing, Planning and Local Government and the Departments of Public Expenditure and Reform, and Finance.
To inform this review, the Central Bank will prepare a paper for the Financial Stability Group (FSG) to examine the financial stability and macro-prudential impacts of the Rebuilding Ireland Home Loan Scheme, including the potential impact on the residential property market of an extension to the scheme and the non-application of the Central Bank’s Loan-to-Income ratio for mortgage lending.
This paper will be presented to a future meeting of the FSG, which meets on a bi-monthly basis.
The Financial Stability Group (FSG) is a forum for senior officials from the Department of Finance, the Central Bank of Ireland, and the National Treasury Management Agency (NTMA) to discuss economic and financial system policies which have repercussions for financial stability
The role and responsibilities of the FSG reflect its overall objective to support optimal financial stability arrangements that allow:
- open discussion, based on effective sharing of information
- coordination of financial sector policies that could affect financial stability
- the assessment of risks, and the putting in place of appropriate contingency plans.
109. Deputy Clare Daly asked the Minister for Finance if funding will be provided for the purchase of an additional mobile X-ray scanner for the Revenue Commissioners; and the additional equipment that has been provided to the Revenue Commissioners' customs service in 2018 and to date in 2019. [11811/19]
View answerI am advised by Revenue that it currently has three mobile x-ray scanners, a ‘backscatter van’ scanner, and a specialist vehicle that contains both x-ray and radiation detection technology. All of the scanners are mobile and can be deployed to both frontier and internal operations. The ‘backscatter van’ scanner is Revenue’s most recent acquisition and became operational in December 2018. The cost of the scanner was part funded by the European Anti-Fraud Office (OLAF).
Revenue has also advised me that it continuously reviews its overall detection capability having regard to evolving risk, developments in technology and the obsolescence of existing equipment. On the basis of its most recent review, Revenue is satisfied that the level of resources currently available is fully sufficient.
110. Deputy Clare Daly asked the Minister for Finance his plans to have a bilateral meeting with his Italian counterpart, Mr. Giovanni Tria. [11812/19]
View answerI regularly meet with my Italian colleague, Minister Tria, at Eurogroup and ECOFIN Council meetings. The next meetings will be held on 11 and 12 March, in Brussels, while an informal meeting of Economic and Financial Affairs Ministers is scheduled for 5-6 April, in Bucharest.
At present, there are no arrangements in place for a bilateral meeting with Minister Tria.
111. Deputy Sean Fleming asked the Minister for Finance the banks in which he or the State has a share holding; the role of public interest directors who can be appointed by him in respect of the banks; the details of the public interest directors on the boards of each of these banks; the date the last public interest director was a member of the board; the names of the directors; the date they completed their term; and if he will make a statement on the matter. [11865/19]
View answerAs the Deputy will be aware, in 2016 the Government announced it would cease the appointment of new public interest directors, PIDS, in the banks in which the State holds a shareholding and reform the process by which State nominees were appointed to the board of the banks.
The date of appointment and date of resignation/cessation of office for each of the public interest directors appointed at AIB, BOI and PTSB are as follows:
|
Bank |
Appointed |
Resignation/cessation |
|
Allied Irish Banks |
||
|
Michael Somers * |
January 2010 |
December 2017 |
|
Dick Spring |
January 2009 |
December 2014 |
|
Declan Collier |
January 2009 |
June 2012 |
|
Bank of Ireland |
||
|
Tom Considine |
January 09 |
December 2017 |
|
Joe Walsh** |
January 09 |
November 2014 |
|
Permanent TSB |
||
|
Margaret Hayes |
December 2008 |
May 2013 |
|
Ray McSharry |
December 2008 |
May 2013 |
* Dr Michael Somers was a Government Nominee (not a Public Interest Director) appointed to the AIB board on 14 January 2010 under the terms of the NPRFC s Preference Share investment of €3.5bn in AIB of May 2009
**Joe Walsh ceased to be a director following his death in November 2014.
Future appointments will be made on foot of my rights as shareholder in each of the banks and not using the powers contained in the Credit Institutions Financial Support (CIFS) Act as was the case with public interest directors. Pursuant to these rights I, as Minister for Finance, can appoint up to two directors to the boards of both AIB and PTSB and one director to the board of Bank of Ireland.
My Department and the Public Appointment Service, PAS, established a transparent process to identify appropriately skilled candidates for nomination to the three banks in which the State holds a shareholding. This includes the establishment of assessment panels to review, assess, interview and compile a list of suitable applicants following which a preferred candidate(s) will be selected by myself, as Minister for Finance. This preferred candidate would then be proposed as the Ministerial nominee to the relevant bank, who in turn will conduct the required governance and submit the candidate for SSM approval in line with their regulatory requirements. The entire process takes over 6 months to conclude.
In 2018 separate processes began in AIB, PTSB and BOI to appoint new state nominated directors under the updated process. In regards to AIB the preferred candidates have been proposed to the bank and are currently undergoing the standard fitness and probity assessments by the regulators. The processes at PTSB and BOI are ongoing.
It is important to note that any company director, regardless of whether or not they are a State nominated director, is subject to the requirements of company law to act in what he or she believes to be the interests of the company to which they are appointed. These are the director’s fiduciary duties which are owed to the company rather than to the appointing shareholder. However under the Companies Act 2014 (as amended) there is a provision allowing a nominee director to have regard to the interests of the appointing shareholder.
I would also note that the new appointment procedure for bank directors needs to have due regard to the distinct differences which exist relative to appointments to State boards. These include the requirements of the SSM ‘Fitness and Probity’ regime and the requirement to have a broad set of expertise relevant to large regulated entities in an ever more complex banking regulatory environment.
114. Deputy John Curran asked the Minister for Finance the progress that has been made to establish a national claims database as recommended by the cost of insurance working group; and if he will make a statement on the matter. [12061/19]
View answerAs the Deputy will be aware, Recommendation 11 of the Cost of Insurance Working Group’s Report on the Cost of Motor Insurance recommended the establishment of a National Claims Information Database to increase transparency in the insurance sector.
The Central Bank (National Claims Information Database) Act 2018 provides the Central Bank with the necessary powers to establish and maintain the Database and this legislation was commenced on 28 January 2019 under the Central Bank (National Claims Information Database) Act 2018 (Commencement) Order 2019 (S.I. No. 2 of 2019).
As the underpinning legislation has been commenced, the Central Bank of Ireland is in the process of making appropriate regulations in respect of the National Claims Information Database, as provided for in the Act. The Act requires the Bank to consult with me as Minister in respect of those regulations and I am expecting the Governor to write to me shortly in that regard. Once this consultation has taken place, the Bank will publish the regulations.
Following on from the similar work completed in the process of producing the Motor Insurance Key Information Reports under Recommendation 12 of the Cost of Insurance Working Group’s Report on the Cost of Motor Insurance, the Central Bank will continue to collaborate with insurance undertakings to ensure efficient data collection. As outlined previously, the Central Bank expects to publish its first report under the Act during the second half of 2019.
115. Deputy John Curran asked the Minister for Finance the steps he has taken to tackle the rising cost of insurance for small businesses; and if he will make a statement on the matter. [12062/19]
View answerBoth I and the Minister of State for Financial Services and Insurance, Mr. Michael D’Arcy T.D., are very conscious of the difficulties that increased insurance costs generally are having on many small businesses in this country.
Consequently, following the publication of its Report on the Cost of Motor Insurance in 2017, the Cost of Insurance Working Group undertook an examination of the employer liability and public liability insurance sectors. This second phase culminated in the publication in January 2018 of the Report on the Cost of Employer and Public Liability Insurance. The Report makes 15 recommendations with 29 associated actions, detailed in an Action Plan with agreed timelines for implementation.
The most recent Progress Update was published last week and shows that 24 out of the total of 26 action points which were due for completion during 2018 overall have been accomplished. I am confident that the two outstanding actions will be completed in the coming months, along with the three remaining action points with deadlines set for various quarters throughout 2019.
The actions implemented to date cut across a number of different areas and include:
- The publication by An Garda Síochána of the Guidelines for the Reporting of Suspected Fraudulent Insurance Claims by Insurance Entities to An Garda Síochána
- The Law Reform Commission confirming that the subject of caps on damages for personal injuries litigation is included in its draft Fifth Programme of Law Reform
- Sections 8 & 14 of the Civil Liability and Courts Act 2004 have been amended to ensure defendants are appropriately notified of a claim having been submitted against their policy and to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected, respectively
- An Garda Síochána commencing the collection of statistics under the new “insurance fraud” category which has been added to the PULSE system
- The Courts Service confirming that it will publish a more detailed breakdown of awards in personal injury cases in its Annual Reports
Undoubtedly the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. In this regard, the Personal Injuries Commission has highlighted the significant differential between award levels in this country and England & Wales for soft tissue injuries (4.4 times), and has made a number of recommendations to address this issue, in particular the establishment of a Judicial Council to compile guidelines for appropriate general damages for various types of personal injury. Minister of State D’Arcy believes that this awards gap needs to be significantly closed (a view which I share) and he and the Minister for Justice and Equality Mr Charlie Flanagan TD are working closely together to ensure that this happens at the earliest opportunity.
Finally, I would like to assure the Deputy that the Cost of Insurance Working Group will continue to focus on implementing the recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Report on the Cost of Motor Insurance. I am hopeful that the cumulative effects of the completion of the two Reports’ recommendations will include increased stability in the pricing of insurance for businesses and a more competitive insurance market.
