Dáil Éireann Debate, Tuesday - 24 July 2018
256. Deputy Michael McGrath asked the Minister for Finance when the collection of the new 2% levy on gross written motor insurance premiums imposed under the Insurance (Amendment) Bill 2018 will commence; if he has had discussions with the insurance industry on whether this levy has already been priced into premiums; and if he will make a statement on the matter. [33864/18]
Amharc ar fhreagraThe Insurance (Amendment) Bill 2018 passed all stages of Seanad Éireann on 17 July 2018. I expect that the Bill will be signed into law by the President in the coming days.
As the Deputy will be aware, Section 16 of the Bill provides a legal basis and sets out the arrangements for vehicle insurers operating in the Irish market to contribute an amount under normal circumstances equivalent to 2% of gross written motor premiums (GWP) to an ex-ante fund to be held by the Motor Insurers' Bureau of Ireland (MIBI), to be known as the Motor Insurers Insolvency Compensation (MIIC) Fund. The purpose of this fund is to ensure that in the event of a future motor insurer insolvency, the insurance industry will be able to pay their 35% share at the earliest available opportunity.
In relation to the question of when the collection of the contribution will commence, Section 1 of the Insurance (Amendment) Bill 2018 provides for a separate commencement of Section 16. This will allow the MIBI adequate time to put the necessary arrangements in place for the new MIIC Fund. Once commenced, vehicle insurers must, not later than 30 June in the following year, pay to the MIIC Fund a contribution calculated in accordance with the relevant legislation.
In relation to the question of whether this contribution has already been priced into premiums, neither I nor the Central Bank of Ireland can 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 an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.
Consequently, I am not in a position to review individual cases nor to direct insurance companies as to the pricing level or terms or conditions that they should apply in particular cases.
