Tuesday, 22 May 2018

Written Answers Nos. 137-155

Departmental Expenditure

Ceisteanna (137)

Mattie McGrath

Ceist:

137. Deputy Mattie McGrath asked the Minister for Finance the breakdown of the travel and subsistence expenses incurred by his Department in the year ending 31 December 2017. [22156/18]

Freagraí scríofa

Minister for Finance

The information requested by the Deputy for travel and subsistence expenses incurred by my department during 2017 is contained in the following table. 

Sum of Trip Value

Classification	Total
Domestic	€82,413.74
EU	€243,624.87
Rest of World	€56,149.61
Grand Total	€382,188.22

Departmental Expenditure

Ceisteanna (138)

Mattie McGrath

Ceist:

138. Deputy Mattie McGrath asked the Minister for Finance the consultancy services, value for money and policy review expenses incurred by his Department in the year ending 31 December 2017. [22172/18]

Freagraí scríofa

Minister for Finance

The information requested by the Deputy for 2017 for consultancy services is contained in the following table.

Supplier	Amount	Details
William Fry	1,663,748	Legal Advice
Arthur Cox	286,960	Legal advice
Indecon	67,121	Professional Fees
Behaviour & Attitudes	64,575	Credit Demand Survey (Recoupable)
Reveal Data Corporation	15,867	eDiscovery – IT Consultancy
Colm McCarthy	4,920	Economic Consultation
Seamus Coffey	4,665	Corporation Tax Review
McCann Fitzgerald Solicitors	3,754	Legal Advice
Mamo TCV	2,460	Maltese Legal Advice
Hayes Solicitors	1,449	Legal advice
	2,115,519

VAT Exemptions

Ceisteanna (139)

Tom Neville

Ceist:

139. Deputy Tom Neville asked the Minister for Finance his views on a matter (details supplied); and if he will make a statement on the matter. [22192/18]

Freagraí scríofa

Minister for Finance

Mountain rescue services are treated in a similar manner to charities in that they are exempt from VAT under the EU VAT Directive. This means that they do not register for VAT and cannot recover VAT incurred on goods and services that they purchase. This non-entitlement to VAT deductibility is a general feature of VAT exemption.

However, in Budget 2018 I announced a VAT compensation scheme for charities which will be introduced in 2019 in respect of VAT expenses incurred in 2018. Charities will be entitled to a refund of a proportion of their VAT costs based on the level of non-public funding they receive, up to a total capped fund of €5 million. Where mountain rescue service operators meet the criteria of this scheme they can avail of the VAT compensation. Work on the introduction of this scheme has been commenced by officials of my Department and the Office of the Revenue Commissioners.

EU Regulations

Ceisteanna (140)

Michael McGrath

Ceist:

140. Deputy Michael McGrath asked the Minister for Finance the position under the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 with regard to the calculation by banks here of break fees for consumers exiting a period on a fixed rate of interest on their mortgage; if he will request the Central Bank to undertake a public awareness campaign in order that consumers are better informed of these changes; if the Central Bank has issued guidance to lenders in respect of the application of the new rules to the calculation of break fees; and if he will make a statement on the matter. [22212/18]

Freagraí scríofa

Minister for Finance

The European Union (Consumer Mortgage Credit Agreements) Regulations 2016, which transposed the Mortgage Credit Directive into Irish law, applies to all relevant credit agreements that come into effect after 21 March 2016.

While the Central Bank has not provided any formal guidance on the matter, part 10 of the Mortgage Credit Regulations provides that a consumer has a right to discharge fully or partially his or her obligations under a credit agreement prior to the expiry of that agreement. In such cases, the consumer shall be entitled to a reduction in the total cost of the credit to the consumer, such reduction consisting of the interest and the costs for the remaining duration of the contract.

On the other hand a creditor shall be entitled to fair and objective compensation, where justified, for possible costs directly linked to the early repayment, but shall not impose a sanction on the consumer, and any such compensation shall not exceed the financial loss of the creditor. The creditor's entitlement to compensation only arises where the borrowing rate provided for in the credit agreement:

- may not be changed, or

- may not be changed over a period of at least one year, or

- may not, for a period of at least five years, exceed the rate applicable on the date of the credit agreement by more than 2 per cent.

Where a consumer seeks to discharge his or her obligations under a credit agreement prior to the expiry of the agreement, the creditor must provide to the consumer without delay after receipt of the request, on paper or on another durable medium, the information necessary to consider that option. That information shall at least quantify the implications for the consumer of discharging his or her obligations prior to the expiry of the credit agreement and clearly set out any assumptions used. Any assumptions used must be reasonable and justifiable.

All regulated entities providing financial services within the State are also required to comply with the Central Bank’s Consumer Protection Code 2012. The Code’s General Principles provide that a regulated entity must ensure that in all its dealings with customers and within the context of its authorisation, it makes full disclosure of all relevant material information, including all charges, in a way that seeks to inform the customer. Provision 4.25 provides that where a regulated entity:

a) offers credit on a fixed interest rate to a personal consumer; or

b) offers a personal consumer the option to fix their rate or to switch to a fixed rate, on an existing credit agreement;

the regulated entity must provide, in the credit documentation, a worked example specific to the personal consumer of the early redemption charge in monetary terms and details in relation to the calculation of this charge.

Revenue Documents

Ceisteanna (141)

Paul Kehoe

Ceist:

141. Deputy Paul Kehoe asked the Minister for Finance the steps that can be taken when a person's accountant has not submitted tax returns and is withholding the person's accounts (details supplied); and if he will make a statement on the matter. [22230/18]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that in the absence of the details of the specific case, it is not possible to be precise about a suggested approach to resolving this issue. However, where there may be a dispute between a taxpayer and his or her accountant, resolution of the dispute is not a matter in which Revenue has a role. Ultimately, the onus is on a taxpayer to ensure compliance with return filing obligations.

If the taxpayer concerned makes immediate contact with the relevant Revenue office or official using the contact details provided on the letter, it may, depending on the particular case circumstances, be possible to grant some additional time to facilitate a resolution of the matters before enforcement action is taken.

NAMA Property Construction

Ceisteanna (142)

Clare Daly

Ceist:

142. Deputy Clare Daly asked the Minister for Finance if the development under way in Malahide beside the old rugby club site is part of the promised delivery of housing by NAMA; the number of units that will be delivered; and if he will make a statement on the matter. [22291/18]

Freagraí scríofa

Minister for Finance

At the outset, I wish to advise the Deputy that NAMA does not own property. Instead NAMA acquired loans and its role is as a secured lender. NAMA-secured property continues to be owned and managed by the property owner, or receiver where one has been appointed. Where NAMA-secured lands have been targeted for the delivery of residential housing, the Deputy will be aware that NAMA's role is not as a developer. Instead, where commercially viable, it funds residential delivery on sites controlled by its debtors and receivers.

In relation to the particular site referenced by the Deputy, I wish to advise her that the lands in question are under the control of a receiver, who has responsibility for the management of the property. I am also advised that these lands form part of a parcel of NAMA-secured lands currently under licence agreement for residential development as part of NAMA's residential delivery programme. I understand in accordance with the planning permission that approximately 150 homes will be delivered on these lands as well as a special needs facility and a retail outlet.

 The Deputy will be aware that NAMA stated in late 2015 that it would aim to fund and facilitate the delivery of up to 20,000 homes by end-2020, assuming that projects were commercially viable. In total, since 2014, NAMA has directly funded the delivery of almost 7,200 homes, with a further 2,728 homes currently under construction, while planning permission has been secured for a further 8,150 units. I would also advise the Deputy that sites controlled by NAMA debtors and receivers are subject to the same Part V planning conditions as other residential developments.

Motor Insurance Regulation

Ceisteanna (143)

Michael McGrath

Ceist:

143. Deputy Michael McGrath asked the Minister for Finance if he is satisfied with the protocol agreed between an organisation (details supplied) and his Department; his views on whether policyholders should be provided with specific reasons as to why their particular insurance premium has increased; and if he will make a statement on the matter. [22339/18]

Freagraí scríofa

Minister for Finance

As the Deputy is aware, in fulfilment of Recommendation 1 from the Report on the Cost of Motor Insurance, a protocol was agreed between Insurance Ireland and my Department which provides a list of reasons for large increases in motor insurance premiums. The content of the agreed document is available on the websites and the social media channels of the major motor insurance providers, and will also be provided to policyholders on renewal.

My Department is satisfied that the information being provided to policyholders fulfils the essence of the recommendation without a need for legislation to underpin it as had been originally stipulated in Action Point 2, which was formulated at a stage when it was envisaged that the document provided to policyholders would be bespoke in nature. It does not consider that it is necessary at this juncture to pursue legislation in respect of the non-bespoke protocol which has been agreed through non-legislative means but will continue to monitor how the protocol is functioning in practice.

In an ideal scenario, I believe policyholders should be furnished with the specific reason or reasons for an increase in their insurance premium. However, the main reason why such a bespoke document cannot be provided is because my Department has been advised that the complexity of the interaction between the customer-facing systems and the underwriting systems in all modern insurance companies would make it very difficult to delineate specific reasons for an individual premium increase. If insurers were to try and link these systems in order to address this issue, it would require very significant IT infrastructural changes at considerable cost, which would almost certainly in turn lead to higher premiums. In addition, the Working Group believes that such an onerous requirement could result in the unintended consequence of discouraging new entrants to the market. Nevertheless, as part of the protocol consumers will be provided with contact details of their insurance provider in order to enable them to receive more “tailored” information if they do not believe any of the listed reasons apply to their situation.

I am keen to improve the level of information provided to policyholders by seeking to have the previous year’s premium included in renewal documentation. My Department has discussed this matter with Insurance Ireland.  It also requested that this information be included in renewal documentation by means of a submission to a consultation which was undertaken by the Central Bank of Ireland – Consultation Paper 114: “Amendments to the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (S.I. No. 74 of 2007)” – which is pursuant to Recommendations 2 and 3 from the Motor Report, and continues to engage with the Central Bank accordingly.

This is an issue which I will continue to keep under review.

Motor Insurance Regulation

Ceisteanna (144, 145)

Michael McGrath

Ceist:

144. Deputy Michael McGrath asked the Minister for Finance when he expects recommendation No. 2 of the report on the cost of motor insurance to be fully completed; his views on whether insurance premiums should be broken down between mandatory and non-mandatory elements; and if he will make a statement on the matter. [22340/18]

Michael McGrath

Ceist:

145. Deputy Michael McGrath asked the Minister for Finance when he expects recommendation No. 3 of the report on the cost of motor insurance to be fully completed; his views on whether the current renewal notification period should be extended from 15 days to 20 working days; and if he will make a statement on the matter. [22341/18]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 144 and 145 together.

The implementation of Recommendations 2 and 3 is being carried out by the Central Bank of Ireland. As Minister for Finance, I support the objective of the Recommendations which involve enhancing the information provided to consumers and improving their experience in taking out an insurance policy.

On 9 November 2017, the CBI published Consultation Paper 114 (CP114): “Amendments to the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (S.I. No. 74 of 2007)”. The purpose of the consultation was to seek views from interested stakeholders on Recommendations 2 and 3. The proposals within the consultation included insurers providing additional information on the premium breakdown to consumers and extending the current renewal notification period, in respect of motor insurance, from 15 working days to 20 working days. The consultation further considered whether the extension of the renewal notification period should be broadened to include other classes of businesses that fall within S.I. No. 74 (e.g., accident and health, fire and other damage to property and general liability insurance).

Eight submissions were received by the Central Bank, including one from the Department of Finance seeking the inclusion of last year’s premium in the additional information being provided to policyholders.

I am informed by the Bank that an analysis of the submissions is being undertaken with continued consideration of potential amendments to S.I. No. 74. They have indicated that a further consultation may be warranted arising from the submissions. In that case, the Central Bank will aim to have any amendments that may be required to S.I. No. 74 completed by the end of the year. This potential delay is flagged in the monitoring dashboard of the 5th Update Report available on the website of the Department of Finance.

Motor Insurance Regulation

Ceisteanna (146)

Michael McGrath

Ceist:

146. Deputy Michael McGrath asked the Minister for Finance the tangible effort being made under recommendation No. 5 of the report on the cost of motor insurance since its publication; when he expects a fully functioning European insurance market to be up and running; and if he will make a statement on the matter. [22342/18]

Freagraí scríofa

Minister for Finance

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. I would like to clarify at the outset that it is possible for an insurance undertaking authorised in one member state to conduct business in another EU/EEA state either through:

- establishing a branch operation in the host country and thus conducting business on a ‘freedom of establishment’ (FOE) basis; or

- writing business from the home country (i.e. where authorised) into the host country on a ‘freedom of services’ (FOS) basis.

In both situations the undertaking is required to meet certain obligations in the host member state, such as becoming a member of the national bureau and the national guarantee fund. These are important requirements as the Bureau is tasked with meeting the requirement of compensating victims of accidents caused by uninsured and unidentified vehicles.

Notwithstanding the extent of the existing framework, the Cost of Insurance Working Group heard from a number of stakeholders that there is room for further harmonisation in cross-border insurance. As the Working Group concluded however, this is a pan-European issue which will only be resolved at that level. In this regard, Recommendation 5 of the Report on the Cost of Motor Insurance recommended that the Department of Finance support efforts and raise awareness of this need to improve cross-border insurance at EU level. The Working Group’s Fifth Quarterly Progress Update was published on 11 May 2018: http://www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf.  That Report outlines the implementation of this recommendation.

In this regard, the Department of Finance is monitoring developments at EU level on an ongoing basis and has instructed the Permanent Representation in Brussels to hold consultations with relevant institutions on issues raised in the report. I understand that officials in the Permanent Representation have been working on ensuring that the key messages from the Working Group’s report are understood by relevant EU officials in Brussels. However, work at EU level will very much depend on the priorities of the European Institutions, especially in the context of the ongoing negotiations with the UK as regard its exit from the EU.

I understand that the European Commission will shortly publish a revised Directive on Motor Insurance, subject to its approval. This proposal will likely cover a range of issues including the portability of claims history statements throughout the EU, possible guarantees towards victims in cases of insurer's insolvency, the scope of the Directive and the insurance of autonomous cars. All of these issues are relevant to the work of the Cost of Insurance Working Group and I welcome the fact that this proposal is due to be published soon.

Finally, an important point to note is that an insurer in considering whether it wants to take on Irish risk business will look at a wide range of factors including the award levels, the legal system, the general claims culture etc. Therefore ultimately, even if we do get a more efficient and accessible EU insurance market, there can be no guarantees that insurers in other jurisdictions will automatically be willing to take on Irish risk. 

Motor Insurance Regulation

Ceisteanna (147)

Michael McGrath

Ceist:

147. Deputy Michael McGrath asked the Minister for Finance if he is satisfied that recommendation No. 6 of the report on the cost of motor insurance has been completed; if he is further satisfied with the situation in which returning emigrants can be either refused insurance or charged higher premiums; the specific legal impediments to enacting legislation that would prohibit discrimination against returning emigrants; and if he will make a statement on the matter. [22343/18]

Freagraí scríofa

Minister for Finance

As the Deputy is aware, in fulfilment of Recommendation 6 from the Report on the Cost of Motor Insurance, a protocol was agreed between Insurance Ireland and the Department of Finance under which insurance companies have committed to accepting the driving experience returning emigrants gained while abroad, when the driver has had previous driving experience in Ireland. The guiding principle of the protocol is to ensure that a returning emigrant is not treated any differently to any other driver subject to their ability to demonstrate, and the insurance company to verify, continuous driving experience and the normal acceptance criteria of the company. What this means is that the returning emigrant will not be disadvantaged from spending time abroad. Furthermore, under the protocol, insurance companies will not distinguish between countries on the basis of which side of the road driving takes place therein or, indeed, whether the country is a member of the EU or not.

In addition to the above, insurance companies have agreed to provide relevant and helpful information on their websites to make it easier for consumers to understand the implications of their move abroad from a motor insurance perspective. As part of this exercise, they will outline what people need to do under a number of different circumstances depending on the length of time they intend being away from Ireland.

If a returning emigrant believes that they have received a high quote due to an insurance provider not accepting driving experience gained while abroad, they should contact the free Insurance Information Service operated by Insurance Ireland, which can be accessed at [e-mail] or 01-6761820.

Ultimately, if a returning emigrant is unable to secure a motor insurance quotation on the open market, they may be in a position to avail of the Declined Cases Agreement (DCA) process, and [e-mail] is the relevant e-mail address in this respect.

In relation to the implementation of Recommendation 6, Insurance Ireland submitted a report to the Department in December 2017. This report confirmed that Insurance Ireland members have agreed to publish the wording of the agreed protocol on their company websites and any other forms of social media, in addition to providing training for staff who can work through issues with emigrants before they leave, whilst they are out of the country and when they return to Ireland. The stated intention is “to resolve any issues well before they arise and for the consumer to be aware of the considerations when moving abroad”. The wording of the agreed protocol is also available on the Insurance Ireland website.

The Insurance Ireland report also outlined some sample cases which demonstrate how the rolling-out of the protocol has led to disputed cases being resolved to the benefit of returning emigrants, and provided figures indicating that the number of such cases being processed under the DCA is decreasing.

In conclusion, my Department is satisfied that the essence of the recommendation is being fulfilled without a need for legislation to underpin it. Moreover, I would be very cautious about going down such a route as in my role as Minister for Finance I cannot interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on the risks they are willing to accept.

You should note however that I will continue to monitor the implementation of this recommendation through my Department’s regular engagement with Insurance Ireland.

Motor Insurance Regulation

Ceisteanna (148)

Michael McGrath

Ceist:

148. Deputy Michael McGrath asked the Minister for Finance his views on whether policyholders should be informed of a claim made against them once that complaint has been lodged; his further views on whether recommendation No. 8 of the report on the cost of motor insurance can be legislated for; when he expects this recommendation to be completed in full; and if he will make a statement on the matter. [22344/18]

Freagraí scríofa

Minister for Finance

As the Deputy will recall, Recommendation 8 from the Report on the Cost of Motor Insurance requires that a protocol be put in place around the requirement for insurance providers to notify a policyholder of claims made against them.

As Minister for Finance, I believe policyholders should of course be informed of a claim as soon as possible after it has been lodged. In addition, while accepting that an insurer has the ultimate right to settle a claim, I am also of the view that it should give appropriate consideration to policyholder’s views in the processing of any such claim. It is also important that a policyholder is informed as soon as a claim is settled.

As outlined recently in PQ 21879/18 regarding Recommendation 8, the Department believes that the substance of the Communication Guidelines for Insurers and Policyholders agreed between the IIF and IBEC in 2003 covers what is required to implement fully this recommendation. However, Insurance Ireland has argued that this recommendation is achieved through the application of the 2012 Consumer Protection Code and that the 2003 Guidelines have been superseded.

The Department is continuing to pursue the implementation of Recommendation 8, in parallel with a related recommendation from the Report on the Cost of Employer and Public Liability Insurance (Recommendation 10). Options are being considered as to the best course of action for bringing the recommendations forward, given industry’s diverging opinion on the matter.

Finally, I am not in a position at this juncture to state when Recommendation 8 of the Motor Report will be fully completed but the Deputy should note that the deadline for implementation of the related Recommendation 10 of the Report on the Cost of Employer and Public Liability Report is Q4 2018.

Motor Insurance Regulation

Ceisteanna (149)

Michael McGrath

Ceist:

149. Deputy Michael McGrath asked the Minister for Finance if he is satisfied that recommendation No. 10 of the report on the cost of motor insurance has been completed; the tangible steps which have been taken to address the issue of insurance for small public service vehicles, including insurance for taxis; and if he will make a statement on the matter. [22345/18]

Freagraí scríofa

Minister for Finance

At the outset the Deputy should note that the Cost of Insurance Working Group’s starting position on insurance for small public service vehicles is that it was not possible for it to make a recommendation on pricing as this is primarily a commercial matter for insurers. It did however recognise that this sector serves a social as well as an economic purpose, particularly in rural areas where public transport is less readily available. This position was acknowledged by the inclusion of Recommendation 10 in the Report of the Cost of Insurance Working Group on the Cost of Motor Insurance. This recommended that the Advisory Committee on Small Public Service Vehicles should enter regular discussions with Insurance Ireland to explore solutions for drivers in the sector.

The Working Group’s Fifth Quarterly Progress Update was published on 11 May 2018: http://www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf. That Report outlines the implementation of this recommendation.

In summary, Insurance Ireland met with the Advisory Committee on Small Public Service Vehicles, commonly known as the Taxi Advisory Committee (TAC), on 22 May 2017. The TAC submitted the required report in relation to this meeting on 21 June 2017 to the Minister for Transport, Tourism and Sport. To date, no further meetings have taken place between the TAC and Insurance Ireland. However, the TAC has advised my officials that it is keeping itself informed of developments in the area, particularly through the industry representatives on the Committee, and future meetings with Insurance Ireland are a part of the TAC strategy. Recommendation 10 has been completed in the sense that the TAC has reported to the Minister for Transport. Notwithstanding this, my view would be that work needs to continue on this general issue.  Therefore, I look forward to further engagements between the TAC and the insurance industry.

I would add that, notwithstanding the role of the TAC, the issues raised by the taxi sector were in the main similar to those affecting consumers generally, notwithstanding that there are risks that are specific to the sector. While there is no silver bullet to reduce the cost of insurance, I believe that cooperation and commitment between all parties can deliver fairer premiums for consumers, including taxi drivers. I note that the most recent CSO data (for April 2018) indicates that private motor insurance premiums have decreased by 19% since peaking in July 2016. While these statistics are not directly relevant to commercial vehicles, I do believe they signal greater stability in pricing on an overall basis and I am hopeful that the general downward direction in pricing will continue.

I also believe that the work of the Cost of Insurance Group should better facilitate potential new entrants to the market. In this regard, I have been informed by my officials that Insurance Ireland has stated that there has been some increase in market capacity in relation to the provision of motor insurance for taxi drivers recently.

Motor Insurance Regulation

Ceisteanna (150)

Michael McGrath

Ceist:

150. Deputy Michael McGrath asked the Minister for Finance if he is satisfied that recommendation No. 12 of the report on the cost of motor insurance has been completed; if his Department will use and report on data obtained independently of an organisation (details supplied); if independent analysts have been engaged on behalf of his Department rather than on behalf of the organisation; and if he will make a statement on the matter. [22346/18]

Freagraí scríofa

Minister for Finance

The Deputy will be aware that the Minister of State, with special responsibility for Financial Services and Insurance, Michael D'Arcy T.D., published the second Motor Insurance Key Information Report of the Cost of Insurance Working Group (the Working Group) on 11 May 2018. The Report is the second in a series of reports designed to address Recommendation 12 of the Cost of Insurance Working Group, which aim to increase the level of transparency of the insurance sector in advance of the National Claims Information Database. The Report follows up on the first report, published in July 2017. It is likely that there will be at least one further report prior to the establishment of the National Claims Information Database.

By way of additional information on the production of these reports, a Sub-group of the Cost of Insurance Working Group, chaired by the Department of Finance, was established in January 2017 to implement this and other recommendations to improve data transparency. The Sub-group engaged extensively with Insurance Ireland who indicated that a number of the metrics identified in the Working Group’s Report were not available in a consistent fashion due to different definitions and different ways for reporting and recording data. Notwithstanding this, a data set was agreed and a data request was issued to Insurance Ireland in March 2017.

This request sought information in two tranches. The first tranche was received on 13 June 2017 and resulted in the publication of the first Motor Insurance Key Information Report in July 2017. In line with the complexity of the additional data being requested in the second tranche, it was agreed that Insurance Ireland would engage independent consultants - Verisk - to collect and compile the data in the case of this more complex data set. On 18 December 2017, a return, in the form of a report by Verisk outlining certain data and conclusions, was submitted to the Department by Insurance Ireland.

Subsequently, the Department and the Sub-group engaged with Insurance Ireland seeking some clarifications in relation to how the data and the conclusions presented were arrived at.

The Department, while accepting that the process to collate the data was rigorous, emphasises that any conclusions reached on the data are Verisk’s and have not been subject to any further actuarial analysis by it or the Central Bank, other than for clarifications. This is because, from a practical and cost perspective, the subgroup saw little to be gained from procuring a further independent actuarial analysis to verify the return, where it was satisfied that a robust process was evidenced by the detailed approach to the gathering of this data by Verisk. In addition, it should be noted that over the course of its work, the Sub-group took the view that the production of reports on a quarterly basis was not realistic in view of the complexity of the data exercise.

To conclude, while the recommendation is seen primarily as an interim step that increases the level of transparency in advance of the establishment of the National Claims Information Database, I believe that the series of reports are an important foundation stone as they have helped prepare industry for the new database. In addition, in view of the challenges in collating and analysing aggregate level data across the insurance sector in Ireland, this exercise strongly demonstrates the value and need for the National Claims Information Database. 

Motor Insurance Regulation

Ceisteanna (151)

Michael McGrath

Ceist:

151. Deputy Michael McGrath asked the Minister for Finance when he expects recommendation No. 13 of the report on the cost of motor insurance to be completed; if he is satisfied that a claim-by-claim register can be set up; if the data sub-group has addressed the cost implications to the State, the potential barriers to entry issues and the data protection issues; and if he will make a statement on the matter. [22347/18]

Freagraí scríofa

Minister for Finance

Recommendation 13 of the Cost of Insurance Working Group recommended that the Department of Finance consider the feasibility of a longer term insurance claim-by-claim register. Two associated actions were recommended as part of this recommendation:

- To establish a sub-group to consider the feasibility of a longer term claim by claim register by Q1 of 2018, and

- To Report on the feasibility of a claim by claim register by Q3 2018.

The Working Group’s Fifth Quarterly Progress Update was published on 11 May 2018: http://www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf. That Report outlines some of the progress to date on this recommendation.

In summary, in relation to the first action point, in Q1 of this year, the data sub-group, which was established to drive the implementation of each of the data related recommendations, commenced work on considering the feasibility of a longer term claim-by-claim register. It agreed a draft work plan and decided to undertake a consultation in Q2 with a view to seeking the views of stakeholders on the key considerations required when looking at the feasibility of a claim-by-claim register.

To that end, I launched a public consultation on 14 May 2018 and it is available on the Department of Finance’s website: http://www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf. It will remain open until 22 June 2018.

The objective of this consultation is to seek the views of stakeholders, including insurance undertakings and intermediaries, consumers, other state bodies and interest groups, on what the added value of a claim-by-claim register would be in addition to the National Claims Information Database and the Insurance Fraud Database. The National Claims Information Database is currently being developed by the Department of Finance and the Central Bank of Ireland, and the Insurance Fraud Database is currently being developed by the Department of Justice.

In particular, I am keen to try and identify what form a claim-by-claim register could take, as there are a diverse range of views in relation to this matter, as well as a number of considerations which would need to be satisfactorily taken account of, including those which the Deputy mentions, namely data protection, cost and potential barriers to entry.

Following the consultation process, the data Sub-group will review the responses, meet with relevant stakeholders and carry out its own further research. Given the timeline and work plan that are in place, I expect that the Report on the feasibility of a claim by claim register will be available by the Q3 deadline set down in the Report.

Motor Insurance Regulation

Ceisteanna (152)

Michael McGrath

Ceist:

152. Deputy Michael McGrath asked the Minister for Finance if he is satisfied that recommendation No. 21 of the report on the cost of motor insurance has been completed as specified in the fifth progress update; when he expects to publish legislation under recommendation No. 21 of the report; when he envisages the legislation being enacted; and if he will make a statement on the matter. [22353/18]

Freagraí scríofa

Minister for Finance

Recommendation 21 of the Cost of Insurance Working Group Report calls for the Implementation of the Review of the Framework for Motor Insurance Compensation in Ireland.

The Deputy will be aware that the Fifth Progress Update, published earlier this month, provided an update on the implementation of this Recommendation stating that the Department of Finance is continuing to work with the Office of the Parliamentary Counsel to progress drafting of the Bill, which will implement 3 of the 4 key recommendations and which is expected to be finalised in May. It also noted that the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach has commenced pre-legislative scrutiny which it is hoped will be completed shortly.

The Deputy will also be aware of my decision in principle that the State will ensure that Setanta third party claimants are compensated in full, which was announced on 30 January and which had not been included in the recommendations of either the Review of the Framework for Motor Insurance Compensation in Ireland or the Cost of Insurance Working Group Report. The Department of Finance has received confirmation from the Office of the Attorney General that there are no state-aid or other legal issues with this decision, and has therefore proceeded with the detailed arrangements to implement it. An additional provision to give effect to this decision is being included in the Insurance (Amendment) Bill, which has now been finalised by my officials in liaison with the Office of Parliamentary Counsel and is expected to be brought to Government for approval to publish at the next available opportunity. Once this is done I look forward to working with the Deputy to bring this important legislative piece through the Houses of the Oireachtas.

Additionally, the recommendation that the provisions contained in section 78A of the Road Traffic Act 1961, requiring insurers to supply details to the Minister for Transport, Tourism and Sport, be amended to provide greater clarity on what is meant by the term "details", was implemented by section 30 of the Road Traffic Act 2016. This section has yet to be commenced.

Disabled Drivers and Passengers Scheme

Ceisteanna (153)

Charlie McConalogue

Ceist:

153. Deputy Charlie McConalogue asked the Minister for Finance the pathways by which the application of vehicle registration tax, VRT, and VAT on an imported vehicle for use by a charitable organisation can be offset in view of the difficulties and financial pressure this will place on persons (details supplied) and an organisation; and if he will make a statement on the matter. [22385/18]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that charitable organisations can claim a repayment of VRT and VAT paid on specially constructed or adapted vehicles under the Drivers/Passengers with Disabilities scheme. The scheme is provided for by the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, (S.I. No 353 of 1994, as amended). The adapted vehicles must be used to transport a person or persons who are severely and permanently disabled and who hold a Primary Medical Certificate which fulfils one or more of the medical criteria set out in Regulation 3 of the legislation. Full details of the scheme are set out in information leaflet VRT 7, which is available on the Revenue website at www.revenue.ie

In order to qualify under the scheme, an organisation must be a charitable organisation within the meaning of the Charities Act 2009 (No. 6 of 2009), that is:

(a) entered in the register of charitable organisations under Part 3 of that Act, and

(b) whose purpose is to provide services to persons with disabilities, and

(c) in furtherance of that purpose, is engaged in the care and transport of disabled persons.

Revenue has confirmed that it has not to date received an application from the organisation in question for relief from VRT or VAT under the Drivers/Passengers with Disabilities scheme. If the organisation wishes to make an application in respect of a particular vehicle it should complete the Form DDO online, via ROS or myAccount at www.revenue.ie.

If the organisation requires any further advice or assistance it should contact Revenue at telephone number 1890 60 60 61.

Central Bank of Ireland Supervision

Ceisteanna (154)

Pearse Doherty

Ceist:

154. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank will carry out an investigation into specific mortgage loans made by banks to their own directors as reported in the media on 16 May 2018 or examine this issue in its generality; and if he will make a statement on the matter. [22412/18]

Freagraí scríofa

Minister for Finance

The Central Bank of Ireland continues to supervise banks as part of its ongoing supervisory engagements on credit risk matters which includes their compliance with the Code of Practice on Lending to Related Parties 2013 (available here: https://www.centralbank.ie/docs/default-source/Regulation/codes/gns-4-1-7-amd-cop-lending-to-rel-parties-0613.pdf?sfvrsn=4).

In order to guard against abuses in lending to related parties and to address possible conflicts of interest, the Central Bank requires that such lending be on an arm’s length basis and subject to appropriate management oversight and limits. Arm's length basis means that the parties to a transaction are independent and on an equal footing. A related party is a director, senior manager or significant shareholder of the credit institution or an entity in which the credit institution has a significant shareholding, as well as a connected person of any of the aforementioned persons.

Connected Persons and Clients are:

(a) a spouse, domestic partner, civil partner (within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010) or child (whether natural or adopted) of a person;

(b) two or more natural or legal persons who, unless it is shown otherwise, constitute a single risk because one of them, directly or indirectly, has control over the other or others; or

(c) two or more natural or legal persons between whom there is no relationship of control as set out in point (b) but who are to be regarded as constituting a single risk because they are so interconnected that, if one of them were to experience financial problems, the other or all of the others would be likely to encounter repayment difficulties.

The Code of Practice on Lending to Related Parties 2013 ("the Code") is imposed pursuant to Section 117 of the Central Bank Act 1989 on banks incorporated in the State licensed under Section 9 of the Central Bank Act 1971, including those designated under the Asset Covered Securities Act 2001 and on building societies authorised under the Building Societies Act 1989. Separately from this document, the reporting requirements described in Part 7 of the Code will be imposed from time to time pursuant to Section 117(3) (a) of the Central Bank Act 1989.

The original 2010 Code came into force on 1 January 2011. This revised Code came into force on 1 July 2013. When granting or dealing with loans to related parties the Code provides that:

a) a credit institution shall not grant a loan to a related party on more favourable terms (including without limitation terms as to credit assessment, duration, interest rates, amortisation schedules, collateral requirements) than a loan by the credit institution to non-related parties. An exemption is permitted for beneficial terms that are part of a remuneration package available to staff of the credit institution generally (e.g. staff loans at favourable rates) provided that such terms have been approved by the Board;

b) a loan to a related party, or any variation of the terms of a loan to a related party, shall be subject to individual prior approval by the Board or a subcommittee of the Board established specifically to deal with related party lending where that subcommittee reports directly to the Board. Board members with conflicts of interest shall be excluded from the approval process;

c) actions in respect of the management of a loan to a related party (including but not limited to permitting interest roll-up, granting a grace period for payment, loan write-off in whole or in part, provisioning against a loan, decisions to take or not to take enforcement action) shall be subject to individual prior approval in writing by the  Board or a subcommittee of the Board established specifically to deal with related party lending where that subcommittee reports directly to the Board;

d) where loans to a related party will exceed one million Euro the prior approval of the Central Bank is required.

The tax system provides for preferential loans to be treated as benefits in kind, which ensures that beneficiaries pay universal social charge, pay as you earn and pay related social insurance on the benefit. This tax treatment is important in terms of the equity of our income tax system.

Tax Credits

Ceisteanna (155)

Billy Kelleher

Ceist:

155. Deputy Billy Kelleher asked the Minister for Finance the research and development tax credits availed of in bands (details supplied) in 2015 and 2016; and the number of firms that availed of same by size. [22476/18]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that the numbers of companies availing of the research and development (R&D) tax credit in the years 2015 and 2016, by range of the value of credit used, is set out in Table 1.

Table 1 - No. of companies availing of R&D tax credit by range of credit used (euro)

	€1 – €50,000	€50,001-€100,000	€100,001 - €250,000	€250,001 - €500,000	€500,001 - €1,000,000	€1,000,001-€5,000,000	Over €5,000,000
2015	846	250	238	86	57	45	13
2016	812	258	246	80	49	48	13

The number of companies availing of the R&D credit by range of number of employees is as shown in Table 2. The source of the information is the Corporation Tax returns matched against employer returns. However it should be noted that, as company structures are sometimes organised in such a way that employees are paid by one company in a group, it may appear that a company has low (or no) numbers of employees but actually the employees are employed by a different company within the group.

Table 2 Number of companies availing of R&D tax credit by employee number

	Less than or equal to 10 employees	11 and 49 employees	50 to 249 employees	250 employees or more
2015	502	560	330	143
2016	470	550	334	152

Revenue has advised me that, due to the small numbers of companies involved in some categories and the need to protect the confidentiality of taxpayer information, it is not possible to provide a combined table of the numbers of companies by both amount of credit used and employee numbers.