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Insurance Industry

Dáil Éireann Debate, Tuesday - 8 September 2020

Tuesday, 8 September 2020

Questions (302, 304)

Pearse Doherty

Question:

302. Deputy Pearse Doherty asked the Minister for Finance the number of insurers that have communicated to the Central Bank an intention to pay dividends in 2020; the actions of the Central Bank in response in each case; and if he will make a statement on the matter. [22206/20]

View answer

Pearse Doherty

Question:

304. Deputy Pearse Doherty asked the Minister for Finance the number of insurers that have communicated to the Central Bank an intention to pay bonuses in 2020; the actions of the Central Bank in response in each case; and if he will make a statement on the matter. [22208/20]

View answer

Written answers

I propose to take Questions Nos. 302 and 304 together.

In response to the Deputy’s question, my officials contacted the Central Bank of Ireland (CBI) for information on these matters. In their reply, the CBI indicated that as the information sought by the Deputy relates to their day-to-day supervisory work of insurers and reinsurers, they are precluded from providing a response to your question. They also noted that they do not divulge firm specific information with respect to their supervisory activities. However, the CBI did state that it has set out its position in relation to dividend distributions and variable remuneration (including bonuses) by insurers (including reinsurers) on its website.

In this regard, in relation to the payment of dividends specifically, the CBI notes that the impact of COVID-19 on the solvency and liquidity positions of insurance firms remains uncertain, but it is likely to be significant for many of the insurance firms under its supervision. In this context, the CBI considers that insurance firms should postpone any payment of dividend distributions or similar transactions until they can forecast their costs and future revenues with a greater degree of certainty. Where the board of an insurance firm forms the view that a high level of certainty has been reached and wishes to make a distribution, the CBI expects the firm to engage with its supervision team before proceeding with the distribution, demonstrating satisfactory forward looking solvency, liquidity and operational resilience positions in light of the current environment.

In relation to the payment of bonuses, the CBI informed my officials that it expects firms to exercise prudence in respect of their variable remuneration policies, including considering whether postponement of related payments would be appropriate during this time.

In conclusion, the CBI notes that both approaches above are consistent with the relevant statement published by EIOPA on 2 April and the recommendation of the ESRB on 8 June. The Deputy will be aware from my previous replies of 20 May and 23 June to Deputy Carthy on the issue of dividend payments that I understand that a number of firms have announced that they have deferred paying dividends in the context of these statements and I welcome this approach.

Question No. 303 answered with Question No. 301.
Question No. 304 answered with Question No. 302.
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