Dáil Éireann Debate, Thursday - 13 October 2022
217. Deputy Pearse Doherty asked the Minister for Finance the average annual costs to the Central Bank of preparing, producing and publishing the National Claims Information Database; the options that are being considered by his Department with respect to the reimbursement mechanism provided in Section 11 of the Central Bank (National Claims Information Database) Act 2018; and if he will make a statement on the matter. [51036/22]
View answerTransparency on the functioning of the insurance market remains a key policy focus and represents an important part of the Government’s ongoing insurance reform agenda. Accordingly, the introduction of the National Claims Information Database (NCID) within the Central Bank of Ireland (CBI) was a key step change in improving transparency, providing information and an evidence base for policy formation.
Currently the NCID reports on private motor insurance and employers’ liability, public liability and commercial property insurance, providing information on claims, and in turn the impact these have on insurance costs. Ireland is unique in the EU in having this level of information, allowing us to analyse and understand industry-level developments.
I would note that the NCID has been well received by all sides of this House, as well as by the general public. It is a valuable resource and therefore it is important that it be sufficiently funded to ensure it continues to provide an evidence base as part of the Government’s insurance reform agenda. The fourth NCID Private Motor Report, to be published later this quarter, will contain some initial insights as to the impact of the Personal Injuries Guidelines introduced in 2021.
The NCID is underpinned by legislation, namely the Central Bank (National Claims Information Database) Act 2018 . While the CBI is responsible for the NCID, it is important to note that this is not deemed to be a “central bank task” under European law, as per the European Central Bank’s Opinion (CON/2018/43) on this legislation. Therefore, the CBI is not permitted to pay for the cost of establishing and running the NCID from its own resources. This provision is designed to ensure Member State governments do not outsource “non-bank” activities to their central banks and leave them with the associated costs.
Consequently, Section 11 of the 2018 Act requires the CBI to make Regulations to recoup the cost of the NCID by prescribing levies to be paid by insurance undertakings. These levies should not be directly charged to consumers. This provision has been in place since 2018 when passed by the Oireachtas, with industry having been aware of it.
The Central Bank is working on a regulation to establish a levy which will recoup the Bank's costs in operating the NCID. I understand that this work will be completed in the coming months. When that work is completed, the Bank will provide details on how the levy is calculated. The money raised will cover, on a retrospective basis, the set-up and design cost of both NCID databases. Furthermore, I understand that it is proposed that the ongoing running cost of the NCID publications will now be met on an annual basis.
At this point, the preparations are proceeding through the Central Bank’s internal approval processes and will be made known in the coming months. Accordingly, I am unable to comment any further until I am briefed on the outcome of the ongoing work of the Central Bank.
