Insurance Industry Regulation

Thursday, 4 October 2012

Ceisteanna (77)

Joe Higgins

Ceist:

77. Deputy Joe Higgins asked the Minister for Finance if he will confirm that, when car insurers are authorised by way of written consent for the insured including specific instruction to pay the garage/shop for windscreen replacement, and, following said instruction the insurer settles the claim by sending payment to the insured rather than the garage/shop, and, the insured does not subsequently make payment to the garage/shop, that in this case, the insured has incurred a tax liability under Section 535 and 536 of the Taxes Consolidation Act (1997) and that the insurer by not issuing payment to the garage/shop is in contravention of Statutory Instrument 651 of 2003 EC (Fourth Motor Insurance Directive) Regulations, Road Traffic Act (1961) and Consumer Protection Code 2012. [42431/12]

Amharc ar fhreagra

Freagraí scríofa

Minister for Finance

The day to day responsibility for the supervision and authorisation of financial institutions is a matter for the Central Bank which is statutorily independent in the exercise of its regulatory functions. As such the matter was referred to the Bank for its views. The Bank has indicated that there is no basis for an investigation into this matter as it does not believe there has been any breach of insurance regulations or the consumer code. In relation to the tax aspect of the question the Revenue Commissioners have informed me that in the circumstances outlined in the question, it would seem that the insured has incurred a capital gains tax liability under Section 535 of the Taxes Consolidation Act, 1997. However, an annual exemption of 1,270 Euro is provided for in the capital gains tax code in the case of gains made by individuals. In addition, if the payment received by the insured is used to acquire a replacement windscreen, this would be treated as tax neutral, provided the individual concerned makes a claim to the Revenue Commissioners for this treatment to apply.