Dáil Éireann Debate, Wednesday - 2 June 2021
98. Deputy Ged Nash asked the Minister for Finance the amount raised by the 1% insurance levy each year since its introduction; if he is currently reviewing the operation of the levy; and if he will make a statement on the matter. [30023/21]
View answerAt the outset, it is important to note there are various levies and contributions in existence on insurance premiums. These serve different, defined purposes with some having been in place for a number of years. I should also state that there are no plans to discontinue them at this time. These various levies and contributions are briefly detailed below.
The 2 per cent Insurance Compensation Fund (ICF) levy is the only pure "levy" charged on insurance premiums. This is charged to fund the ICF which covers the cost of claims in this State where an insurer goes into liquidation. This levy was in place from 1984 to 1992 and was reintroduced in January 2012. It currently applies at a rate of 2 per cent of premiums received on all non-life insurance policies and its purpose is primarily to repay the Exchequer for funding the administration of Quinn Insurance. As there is still a significant amount owing to the State, the levy is likely to be applied for the remainder of this decade.
Separately, while there is not a 1 per cent insurance levy, the Deputy may be referring to the stamp duty charged on life insurance premiums, which is occasionally described as a levy. However, this is recorded to the Exchequer as a tax receipt jointly with a separate 3 per cent stamp duty charged on certain non-life premiums. As such it is not possible to differentiate both distinctly. Information on Stamp Duty yields, which includes these Life Assurance and Non-Life Insurance Levy components from 2010 onwards, can be found on the Revenue website statistics page: www.revenue.ie/en/corporate/documents/statistics/receipts/stamp-duty-receipts.pdf. I am informed by Revenue that given the scope of the question, they are not in a position to provide the information in the time available. However, since 2010 the amount collected under these specific stamp duties is c.€1.6 billion.
Finally, the Deputy may wish to note the Motor Insurers Insolvency Compensation Fund (MIIC Fund) is a contribution equivalent to 2 per cent of gross motor premiums which is provided by motor insurers. This is not considered a levy as the decision rests with the insurance companies as to how this is financed i.e. either through absorbing it or passing it onto consumers. This ensures the compensation levels payable from the ICF for third party motor insurance claims as a result of a motor insurer insolvency is aligned with that where a motorist is in a collision with an unidentified or uninsured driver.
The contribution rate is subject to an annual review by me in my role as Minister of Finance. Currently, it is expected to continue for a number of years.
