Vol. 428 No. 2
97 Proinsias De Rossa asked the Minister for Finance the total amount of money paid out of public funds to help rescue the Insurance Corporation of Ireland since its collapse in 1985; the total paid by Allied Irish Banks and the other licensed banks; the total amount likely to be paid from public moneys by the time the rescue package is completed; and if he will make a statement on the matter.
The funding arrangements for ICAROM plc. — formally Insurance Company of Ireland — are set out in two agreements, details of which have been made public in 1985 and 1992.
Under the 1985 agreement the Minister for Finance advanced £100 million to the Administrator of ICI for a period of 15 years. This advance was provided by way of a loan to the Minister by the Central Bank and was funded in turn by a special deposit of £70 million placed by AIB with the Central Bank, and £30 million of the Central Bank's own resources. The interest rate on the total amount is subsidised by AIB and the other banks to the amount of £7 million per annum. AIB pays £5.5 million of this annual subsidy.
Under the 1992 agreement, AIB agreed to share the remaining liability of £267 million. They are to pay a sum of £8.8 million per annum to the Administrator over 20 years. As part of this agreement the Exchequer is to provide the Administrator with an interest free loan of £32 million in the course of 1993. This loan is for 20 years, repayable in 2012 and is to be funded by the Central Bank.
No money has been paid from public funds to date. As earlier indicated the Minister for Finance has advanced a sum of £100 million in the manner described and a further, interest free, loan of £32 million to be made this year.
