I move that the Bill be now read a Second Time.
The Insurance Act, 1953, provided power for the Minister for Industry and Commerce, with the consent of the Minister for Finance, to give guarantees with respect to the insurance of risks in connection with exports. The Act provides that arrangements for the giving of export guarantees may include agreements with assurance companies for the re-insurance of guarantees given by them. In exercise of these powers an agreement was entered into with a group of Irish insurance companies for the re-insurance of political risks insurance policies issued by them. These policies provide exporters with cover against the risk of loss due to such causes as action by foreign governments preventing the transfer of payment for goods to Ireland. Only in an exceptional case have these powers been used to insure commercial risks which are normally left to commercial insurance companies.
The guarantees which I am empowered to give under the 1953 Act must be for the purpose of encouraging exports. I have had representations concerning the need for similar guarantees in connection with design and planning services carried out by Irish firms for principals outside the State. I am advised, however, that my powers under the Insurance Act, 1953, do not extend to giving guarantees in connection with the rendering of services unconnected with external trade in goods or merchandise. I consider that it is desirable that I should have power to give guarantees with respect to the insurance of risks in connection with the carrying out of desing and planning services for principals outside the State similar to the powers which I have to give guarantees with respect to the insurance of risks in connection with the export of goods. The first purpose of this amending Bill is to extend the powers conferred on the Minister for Industry and Commerce by the Insurance Act, 1953, to cover design and planning services, the work on the rendering of which is carried out in the State in connection with engineering or constructional works executed outside the State.
In the Insurance Act, 1953, the aggregate amount of the liability at any time of the Minister for principal moneys in respect of arrangements under the Act was fixed at £2 million. In 1961 the Oireachtas increased the limit to £5 million. This is just barely sufficient to meet the present level of demand for export guarantees under the arrangements in force. I consider it necessary that the statutory limit of £5 million should be raised in order to provide for the growing demand for insurance cover for exports of goods arising from the increased volume of exports and also to provide for any liabilities that might be assumed on the guarantees in relation to the design and planning services. I think that £10 million is a suitable figure. The aggregate potential liability would, of course, become an actual liability only if all the risks covered by the insurance policies materialise. As Deputies will appreciate, that is an extremely remote contingency.
The present Bill will facilitate the expansion of our exports by making possible the continuance on an increasing scale of insurance cover for exporters of goods and the provision of insurance cover in relation to design and planning services for overseas clients. The risks to be covered which are inseparable from export trade are mainly risks of the type that cannot normally be covered by insurance or otherwise guarded against by commercial means.
