Dáil Éireann Debate, Wednesday - 30 April 2014
80. Deputy Michael McGrath asked the Minister for Finance the current balance on the insurance compensation fund; his views on whether this is adequate to meet all possible claims made upon it; and if he will make a statement on the matter. [19151/14]
Amharc ar fhreagra101. Deputy Pearse Doherty asked the Minister for Finance his plan to adjust the insurance levy or introduce any new levy in view of the collapse of Setanta Insurance. [19418/14]
Amharc ar fhreagraI propose to take Questions Nos. 80 and 101 together.
The Insurance Compensation Fund (ICF) levy being applied to home, motor and commercial insurance, and which came into effect from 1 January 2012, operates under the Insurance Act 1964. Its purpose is to protect policy holders in the event of their insurer becoming insolvent.
Under Section 6 of the Insurance Act 1964 the responsibility for deciding whether the ICF has sufficient funds available to it at any particular time is a matter for the Central Bank of Ireland. Where, in the Central Bank's opinion, the state of the Fund is such that financial support should be provided for it, it determines an appropriate contribution to be paid to it by each insurer calculated as a percentage, not exceeding 2% of the aggregate of the gross premiums paid to that insurer in respect of policies issued in respect of risks in the State. The levy is already at the 2% maximum level provided for under the legislation.
Because the ICF is not pre-funded, there is a provision in the 1964 Insurance Act which allows the Minister for Finance to provide the necessary monies in the form of a repayable loan where there are insufficient funds available.
The balance of the Insurance Compensation Fund as at the 25th April 2014 was €31,199,821.20. It is anticipated that the Insurance Compensation Fund will be adequately funded to meet all expected claims on the fund.
