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Gnáthamharc

Wednesday, 19 Dec 2018

Written Answers Nos. 132-153

NAMA Accounts

Ceisteanna (132)

Michael McGrath

Ceist:

132. Deputy Michael McGrath asked the Minister for Finance the projected surplus from the National Asset Management Agency; the return on investment this will represent; if the surplus will be received into the Exchequer when NAMA is wound up; and if he will make a statement on the matter. [53746/18]

Amharc ar fhreagra

Freagraí scríofa

I wish to advise the Deputy that it is expected that NAMA will substantially complete its work by 2020/2021 and that, over those two years, the Agency expects that a surplus currently projected to be €3.5bn will be available for return to the State. However it is important to note that this surplus has yet to fully crystallise. Its realisation depends on the success of NAMA's ongoing deleveraging, its Dublin Docklands SDZ programme and residential funding programme. These activities must be completed for the expected surplus to be earned.

In 2014, the NAMA Board approved an Entity Return on Investment (‘EROI’) target benchmark of 20%. The projected return as at end-2017 was 35%. The EROI benchmark is calculated based on the comparison of NAMA’s projected terminal surplus position with NAMA’s initial investment, as adjusted to exclude the €5.6 billion in State Aid which NAMA was required to pay to the Participating Institutions as part of the loan acquisition price.

As per section 60(2) of the NAMA Act 2009, NAMA may use surplus funds to redeem and cancel its senior and subordinated debt. Surplus funds may only be returned to the Exchequer once NAMA's debt has been redeemed in full in 2020.

Any NAMA surplus paid, while Exchequer positive, will not impact the general government balance, in line with EUROSTAT rules. It will be a decision for the Government as to how any surplus returned by NAMA will be utilised within the framework of the fiscal rules. However, the intention has always been to use such receipts from the resolution of the financial sector crisis to pay down our national debt and reduce our debt servicing costs.

Mortgage Book Sales

Ceisteanna (133)

Michael McGrath

Ceist:

133. Deputy Michael McGrath asked the Minister for Finance if consideration has been given to placing the code of practice on the transfer of mortgages on a statutory footing; and if he will make a statement on the matter. [53747/18]

Amharc ar fhreagra

Freagraí scríofa

The Code of Practice on the Transfer of Mortgages was introduced in 1991. As the Deputy will be aware, it is a voluntary code.

That said, the enactment of the Consumer Protection (Regulation of Credit Servicing Firms) 2015 means that the protections which a borrower had before a loan was sold were not lost on the sale. Credit servicing firms are now regulated entities and are required as a matter of law to comply with the Central Bank Codes.

Of particular relevance, is paragraph 3.11 of the Consumer Protection Code which provides:

"Where a regulated entity intends to cease operating, merge with another, or to transfer all or part of its regulated activities to another regulated entity it must:

a) notify the Central Bank immediately;

b) provide at least two months' notice to affected consumers to enable them to make alternative arrangements;

c) ensure all outstanding business is properly completed prior to the transfer, merger or cessation of operations or, alternatively in the case of a transfer or merger, inform the consumer of how continuity of service will be provided following the transfer or merger; and

d) in the case of a merger or transfer of regulated activities, inform the consumer that their details are being transferred to the other regulated entity, if that is the case."

Therefore, consumers are fully protected and I have no plans to put this Code on a statutory basis at present.

Alcohol Pricing

Ceisteanna (134)

Michael McGrath

Ceist:

134. Deputy Michael McGrath asked the Minister for Finance his views on whether the VAT system is subsidising below-cost selling of alcohol in circumstances in which the VAT paid on the purchase of alcohol is greater than the VAT received from the sale to the customer and the State refunds the difference; if there are legislative mechanisms to cease same; and if he will make a statement on the matter. [53748/18]

Amharc ar fhreagra

Freagraí scríofa

I would point out that there is no Exchequer loss as a result of below-cost selling of alcohol. VAT is a tax on the value added to a supply, and the collection and recovery of VAT takes place at each stage of the chain of supply from manufacturing to retailer. Under EU and domestic VAT rules, traders who are registered for VAT collect VAT on the goods and services that they sell. In turn such traders are entitled to recover the VAT they incur on their business inputs used in the purchase or production of goods or delivery of services. Consequently, if there is a decrease in value at any stage in the process the trader is entitled to a refund of the excess of VAT incurred over that collected.

In this case, where a retailer is in a situation of net VAT gain as a result of below cost selling, this is not a loss to the Exchequer or an additional benefit to the retailer, it is merely how VAT is charged.

Tax Agreements

Ceisteanna (135)

Michael McGrath

Ceist:

135. Deputy Michael McGrath asked the Minister for Finance the definition of an assimilated member state in terms of tax law in the Tax Consolidation Acts, the Stamp Duty Acts and other taxation Acts; the countries deemed to be assimilated member states; and if he will make a statement on the matter. [53749/18]

Amharc ar fhreagra

Freagraí scríofa

Following correspondence with the Deputy's office, I note that this PQ has been withdrawn.

Tax Reliefs Costs

Ceisteanna (136, 137)

Michael McGrath

Ceist:

136. Deputy Michael McGrath asked the Minister for Finance the annual cost of the research and development tax credit for the previous five years including 2018; the number of companies that have availed of the scheme in each of these years by multinational companies and SME companies; and if he will make a statement on the matter. [53750/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

137. Deputy Michael McGrath asked the Minister for Finance the annual cost of the knowledge development box in each year since its creation; the number of companies that have availed of the scheme in each of these years by multinational companies and SME companies; and if he will make a statement on the matter. [53751/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 136 and 137 together.

I am advised by Revenue that the annual cost of the research and development tax credit for the most recent five years for which data are available (i.e. to 2016), and the number of companies that have availed of the scheme in each of these years, is as set out in the table below.

Year

Total Exchequer Cost (€m)

Number of Companies

2012

282

1,543

2013

421

1,576

2014

553

1,570

2015

708

1,535

2016

670

1,506

This information, together with a range of other available data in respect of the R&D tax credit, is published on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx. This includes the available information in respect of a breakdown by size of the claimant companies.

Information in respect of 2017 will be published during 2019 when returns for that year have been processed and analysed.

In relation to the Knowledge Development Box (KDB), the relief is available in respect of accounting periods commencing on or after 1 January 2016. Given the supporting documentation required, the claimant company has a period of up to 24 months to make a claim for relief under the KDB. A small number of companies (less than 10) with accounting periods ended on or before 31 December 2016 have claimed the relief. The tax cost of these claims to-date is approximately €5 million. Due to taxpayer confidentiality, Revenue cannot comment further on the size or nature of the claimant companies. Information in respect of 2017 will be published during 2019 when returns for the year have been processed and analysed.

Tax Reliefs Costs

Ceisteanna (138)

Michael McGrath

Ceist:

138. Deputy Michael McGrath asked the Minister for Finance the annual cost of the entrepreneurial relief for each year since its establishment including 2018; the number of companies that have availed of the scheme in each of these years by multinational companies and SME companies; and if he will make a statement on the matter. [53752/18]

Amharc ar fhreagra

Freagraí scríofa

It is assumed that the Deputy is referring to the revised entrepreneur relief which is provided for in Section 597AA of the Taxes Consolidation Act 1997 in respect of Capital Gains Tax (CGT) for individuals disposing of certain business assets.

I am advised by Revenue that based on analysis of CGT returns filed for the tax year 2016, the latest year available, approximately 410 individuals have availed of entrepreneurial relief with an estimated cost of approximately €20 million. As the relief is only available to individuals, a breakdown by multinational company and SME is not available.

Tax Reliefs Costs

Ceisteanna (139)

Michael McGrath

Ceist:

139. Deputy Michael McGrath asked the Minister for Finance the annual cost of the special assignee relief programme for the previous five years including 2018; the number of companies that have availed of the scheme in each of these years by multinational companies and SME companies; and if he will make a statement on the matter. [53753/18]

Amharc ar fhreagra

Freagraí scríofa

SARP was introduced in Budget 2012 as part of a strategy to promote Foreign Direct Investment into Ireland, and to allow us to compete internationally to attract highly skilled and mobile executives who act as key decision makers within organisations.

The measure provides income tax relief on a portion of income earned by employees, who are assigned by their employer to work in Ireland, and who previously worked abroad for that employer for a minimum of six months. There is no exemption or relief from USC and PRSI is payable where the individual is not liable to social insurance contributions in the home country.

The 2016 annual Revenue report on SARP shows that for the years 2012 to 2016 (the most recent year for which data are available) the annual cost of the measure was as follows:

Tax Cost 2012

Tax Cost 2013

Tax Cost 2014

Tax Cost 2015

Tax Cost 2016

€0.1 million

€1.9 million

€5.9 million

€9.5 million

€18.1 million

Regarding the Deputy's question as to the number of companies that have availed of the scheme in each of these years by multinational companies and SME companies, Revenue have advised me that a breakdown of company types, whether SME or multinationals, is not available. However, the following table sets out the numbers of individual claimants for the period 2012-2016.

2012

2013

2014

2015

2016

11

121

302

586

793

As the Deputy is aware, I recently brought forward an amendment to the Finance Bill 2018 to place a ceiling of €1 million on eligible income for SARP purposes. This change will be effective for new entrants to the programme from 1 January 2019 and for existing beneficiaries of the programme from 1 January 2020. In addition, I announced that a full review of SARP will be carried out in 2019.

Tax Reliefs Costs

Ceisteanna (140)

Michael McGrath

Ceist:

140. Deputy Michael McGrath asked the Minister for Finance the annual cost of the foreign earnings deduction for the previous five years including 2018; the number of companies that have availed of the scheme in each of these years by multinational companies and SME companies; and if he will make a statement on the matter. [53754/18]

Amharc ar fhreagra

Freagraí scríofa

The Foreign Earnings Deduction (FED) is provided for in section 823A of the Taxes Consolidation Act 1997 (TCA). It provides relief from tax on up to €35,000 of salary for employees who travel out of State to certain countries on behalf of their employer. In order to qualify for FED, an employee must spend a minimum of 30 days abroad in a year and each trip must consist of at least three (3) consecutive days in a qualifying country.

I am advised by Revenue that the most recent data available on the annual cost and the number of individuals who have availed of the scheme are as follows:

Year

No. of individuals

Exchequer Cost (€m)

2016

413

3.5

2015

472

3.2

2014

144

1.1

2013

135

1

2012

108

0.8

I am further advised by Revenue that FED is an allowance that is applied for by the employee through their own tax returns and is not returned at a company level. Therefore, it is not possible to provide the information on the number of companies associated with employees availing of the scheme broken down by multinational companies and SMEs, as requested by the Deputy.

FED is available for travel to the following thirty countries:

Brazil, Russia, India, China, South Africa, Egypt, Algeria, Senegal, Tanzania, Kenya, Nigeria, Ghana, Democratic Republic of the Congo, Japan, Singapore, Republic of Korea, Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Malaysia, Indonesia, Vietnam, Thailand, Chile, Oman, Kuwait, Mexico, Colombia, Pakistan.

Tax Reliefs Data

Ceisteanna (141)

Michael McGrath

Ceist:

141. Deputy Michael McGrath asked the Minister for Finance the take-up of the key employee engagement programme in each month since its establishment; the number of companies that have availed of the scheme in each of these months by multinational companies and SME companies; and if he will make a statement on the matter. [53755/18]

Amharc ar fhreagra

Freagraí scríofa

The Key Employee Engagement Programme, KEEP, came into effect on 1 January 2018 to help SMEs to attract and retain employees in our highly competitive labour market. I am advised by Revenue that details of the costs and numbers availing of this programme will only be available once the relevant employer tax returns for 2018 have been received and processed. The first KEEP return is due on 31 March 2019.

Regarding the Deputy's question as to the breakdown of the number of companies by multinational and SME sector, it should be noted that a company whose shares are the subject of KEEP share options must, at the date of grant, be a micro, small or medium-sized enterprise. In practical terms, this refers to companies which employ fewer than 250 persons, and which have an annual turnover not exceeding €50 million or an annual balance sheet total not exceeding €43 million.

Over the past year, I have become aware that take-up has been less than expected and I took early action in relation to KEEP in the context of Finance Bill 2018.

As the Deputy is aware, Finance Bill 2018 provided for a number of changes to the incentive as follows:

- the maximum annual market value of share options that may be granted to a qualifying employee has increased to equal to 100% of annual emoluments in the year of assessment (from 50% of annual emoluments);

- the overall value of options that may be awarded per employee has increased from the limit of €250,000 in any 3 year period to a lifetime limit of €300,000.

The €3,000,000 overall KEEP limit remains for companies and employees are not restricted in entering into future KEEP arrangements with future employers.

I expect that these changes will help support SMEs to compete for skilled staff. However, my Department also intends to further review KEEP in 2019 once the 2018 data on the scheme become available. It is envisaged that this exercise will include a consultation process with all relevant stakeholders.

Tax Reliefs Costs

Ceisteanna (142)

Michael McGrath

Ceist:

142. Deputy Michael McGrath asked the Minister for Finance the annual cost of the employment and investment incentive scheme for each year since it commenced including 2018; the number of companies that have availed of the scheme in each of these years by multinational companies and SME companies; and if he will make a statement on the matter. [53756/18]

Amharc ar fhreagra

Freagraí scríofa

The Employment and Investment Incentive (“EII”) is an incentive whereby investors can claim relief for investments in qualifying companies.

The annual cost and number of companies that have availed of the scheme between 2012 and 2016, the latest year for which data are currently available, can be found in the table below.

Year

No. of qualifying companies

Tax Cost

2012

78

€4m

2013

190

€12.7m

2014

239

€18.8m

2015

279

€22.2m

2016

261

€32.5m

I am advised by Revenue that while applicant companies for EII must be micro, small or medium sized enterprises they are not required by Revenue to identify whether they have a multi-national character. Accordingly, the breakdown the Deputy has asked for in relation to multi-national companies is not available.

Tax Reliefs Costs

Ceisteanna (143)

Michael McGrath

Ceist:

143. Deputy Michael McGrath asked the Minister for Finance the annual cost of the start-up refunds for entrepreneurs for the previous five years including 2018; the number of companies that have availed of the scheme in each of these years; and if he will make a statement on the matter. [53757/18]

Amharc ar fhreagra

Freagraí scríofa

Start Up Refunds for Entrepreneurs (SURE) provides a refund of tax paid in the previous six tax years to those previously in PAYE employment, or recently unemployed, where they invest funds into a new business set up by them.

The most recent year for which statistics are available on this incentive is 2016. The cost and number of individuals who have availed of SURE for each year from 2012 to 2016 inclusive are as follows:

Year

Cost €m

Claimants

2016

1.9

80

2015

1.8

86

2014

1.8

59

2013

1.3

60

2012

1.6

88

As the Deputy is aware, in 2018 I commissioned a review of the Employment and Investment Incentive (EII) and SURE. Following on from the recommendations made in this review, I have extended both incentives to 31 December 2021.

Tax Appeals Commission

Ceisteanna (144, 145, 146, 147)

Michael McGrath

Ceist:

144. Deputy Michael McGrath asked the Minister for Finance the number of tax appeals before the Tax Appeals Commission; the value of tax these disputes amount to; the appeals by ranges (details supplied), respectively in tabular form; and if he will make a statement on the matter. [53758/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

145. Deputy Michael McGrath asked the Minister for Finance the age and value of tax appeals before the Tax Appeals Commission by ranges (details supplied), respectively in tabular form; and if he will make a statement on the matter. [53759/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

146. Deputy Michael McGrath asked the Minister for Finance the number of new appeals brought before the Tax Appeals Commission in each month since January 2016; the number of cases concluded in each month since January 2016; and if he will make a statement on the matter. [53760/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

147. Deputy Michael McGrath asked the Minister for Finance the number of appeals before the Tax Appeals Commission that have been concluded since January 2016 that have been settled appeals; the value of the settled cases; the number that have been withdrawn; the value these amounted to; the number of cases that have been heard; the value these appeals amounted to; and if he will make a statement on the matter. [53761/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 144 to 147, inclusive, together.

The Tax Appeals Commission ("TAC") was established on 21st March 2016 and new procedures for making, processing, adjudicating and determining appeals came into effect. Before this date taxpayers sent their appeals directly to Revenue who then transferred cases to the Appeal Commissioners when they were ready for a hearing. Since that date, taxpayers send their appeals directly to the TAC which then notifies Revenue of the appeals. The TAC has full control over the processing and hearing of appeals.

I am advised by the TAC that the number of appeals before it fluctuates, depending on a number of factors, including the number of additional appeals received each day; the numbers closed each day; how many appeals are part-settled and how many that will settle based on the outcome of a ‘leader-follower’ appeal. The Commission can also be informed, by an appellant(s) or the Revenue Commissioners, that an appeal has settled or been withdrawn which might indicate a reduction in the number of appeals on hand; however, until this is confirmed by both parties, the TAC cannot deem the matter closed.

I am further advised by the TAC that it is not possible, for the most part, to provide the age of tax appeals before it, as many of them were transmitted to the Commission in large tranches during 2016 by the Office of the Revenue Commissioners. In relation to those ‘legacy’ appeals, some were submitted by the appellant in 2016 to Revenue, but many had been with Revenue for some time before that. Therefore, it is only possible to advise of when the TAC received appeals in 2016, 2017 and 2018. An analysis on this basis is set out below.

Following its establishment in 2016, I am informed that approximately 3,331 appeals transferred to the TAC, at various stages during 2016, from both the Office of the Revenue Commissioners and the Office of the Appeal Commissioners. The TAC has further advised me that, as of 10 December, 2018 it currently has approximately 3,415 active appeals under its remit.

The TAC has informed me that this figure comprises of the following active appeals:

Appeals received 2016:

287

Appeals received 2017:

1,107

Appeals received 2018:

1,051

Legacy Appeals:

748

Pre Establishment:

168

Cases Stated:

54

Total

3,415

The following tables outline the number of new appeals received and concluded in each month since March 2016.

Table 1 – New Appeals Per Month from 21 March 2016, when the TAC was established, to 31 December 2016

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Appeals Received

112

83

74

90

113

71

81

78

94

105

Appeals Closed

16

9

14

15

24

14

14

22

40

41

Table 2 – New Appeals Per Month 2017

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Appeals Received

562

75

177

99

106

82

106

89

108

94

107

153

Appeals Closed

52

39

75

53

131

52

52

45

19

50

44

84

Table 3 – New Appeals Per Month 2018

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Appeals Received

264

134

159

104

196

72

114

127

108

107

102

21

Appeals Closed

65

319

148

141

122

76

117

57

89

154

71

1

The below table gives an outline of how appeals were closed from January, 2017.

Year

Settled

Withdrawn

Determined

Dismissed

Refused

Merged

Total

2016*

209

2017**

410

178

40

41

7

17

693

2018***

635

216

29

156

305

19

1,360

* A breakdown of how appeals were closed in 2016 is provided from the Annual Report of 2016.

** 34 determinations were made in 2017 which affected 40 individual appeals.

*** 38 appeals have been determined in 2018 to date but 11 appeals are classed as Case Stated so they will remain active until the appeals have been heard by the High Court.

With regard to the value of tax associated with these appeals, the following information has been provided by Revenue. It should be noted however that, while Revenue also maintains statistics on appeals, for various reasons these will not necessarily correspond with those provided by the Tax Appeals Commission (TAC). For example, there may be time lags in the notification of new appeals by the TAC to Revenue and time lags in the closure of appeals by the TAC following settlement of an appeal by agreement between Revenue and the appellant.

I have been advised by Revenue of the following information in relation to the amount of tax in dispute with both corresponding value bands and age bands.

Band (€)

Total in dispute (€)

Below 10,000

8,647,824

10,000 to 50,000

27,813,484

50,000 to 1,000,000

255,218,307

1,000,000 to 5,000,000

330,218,562

Above 5,000,000

945,416,789

Total

1,567,314,964

Band (€)

Age (years)

Total in dispute (€)

Below 10,000

Less than 2

6,276,923

Below 10,000

2 to 5

2,181,203

Below 10,000

6 to 10

167,332

Below 10,000

Older than 10

22,366

10,000 to 50,000

Less than 2

8,602,420

10,000 to 50,000

2 to 5

14,850,430

10,000 to 50,000

6 to 10

4,126,670

10,000 to 50,000

Older than 10

233,963

50,000 to 1,000,000

Less than 2

56,982,546

50,000 to 1,000,000

2 to 5

126,902,865

50,000 to 1,000,000

6 to 10

65,959,683

50,000 to 1,000,000

Older than 10

5,373,212

1,000,000 to 5,000,000

Less than 2

51,982,195

1,000,000 to 5,000,000

2 to 5

148,781,441

1,000,000 to 5,000,000

6 to 10

113,902,320

1,000,000 to 5,000,000

Older than 10

15,552,606

Above 5,000,000

Less than 2

466,552,581

Above 5,000,000

2 to 5

234,867,488

Above 5,000,000

6 to 10

198,483,419

Above 5,000,000

Older than 10

45,513,300

Total

1,567,314,964

The Deputy will be aware that I commissioned an independent review of the workload and operations of the Tax Appeals Commission earlier this year, and the resulting report was published on Budget day. The report makes a range of recommendations in relation to increased staffing, improvements to the structure of the TAC and improvements to IT equipment. I have confirmed my full support for the recommendations of the review and have approved a significant increase to the TAC's operating budget for 2019 to address the identified needs. Work is ongoing to implement the recommendations of the review.

Question No. 148 answered with Question No. 122.

Insurance Industry

Ceisteanna (149, 150)

Michael McGrath

Ceist:

149. Deputy Michael McGrath asked the Minister for Finance the number of policyholders impacted by the failure of a company (details supplied) by insurance category, that is, home insurance, motor insurance and so on; and if he will make a statement on the matter. [53945/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

150. Deputy Michael McGrath asked the Minister for Finance the number of claimants here impacted by the failure of a company (details supplied) by insurance category; the rules relating to to the Insurance Compensation Fund for which claims receive 100% compensation and to which claims are subject to the 65% and €825,000 limit; the details of the claimants impacted by the failure of the company by those that fall into the 100% compensation cohort; the number that fall into the 65% and €825,000 limit; and if he will make a statement on the matter. [53946/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 149 and 150 together.

In response to the Deputy’s questions, my officials sought the relevant information from the Central Bank.

The Central Bank has indicated that as of end November 2018, there were 51,012 policyholders in Ireland that have been impacted by the developments with Qudos. Patrona Underwriting Ltd has issued a statement saying that policies remain valid and in force until their natural expiry date, however given the current Qudos position and in line with Central Bank recommendations they have provided brokers with options to replace all insurance covers with other providers at no extra cost to consumers. Qudos has published a Q&A for policyholders on its website - www.qudosinsurance.dk/qa/. The Central Bank advise that the vast majority of these have now been re-broked / transferred to new providers and have provided the following breakdown of the type of policies:

Product Name

Number of Policies

Van

37,948

Fleet

311

Haulage Fleet

21

Haulage non Fleet

29

Non-standard Evolve

397

Private Car

1,366

Household

10,940

Total

51,012

The Central Bank has also indicated that as of 14 December 2018, there was 1,544 open Qudos claims broken down by: Household 155 and Private Car 1,389. However until the solvency or otherwise of Qudos is determined it is not possible to say which compensation scheme may cover eligible claims (i.e. the Danish or Irish scheme).

In relation to the rules of the Irish Insurance Compensation Fund (ICF), the Deputy will be aware that its fundamental purpose is to provide a certain minimum level of protection for policyholders where an insurance company goes into liquidation. Under the scheme, as a general rule a claimant is entitled to a payment up to 65% of their claim or €825,000 whichever is the less. However the Insurance (Amendment) Act 2018 has increased the level of ICF coverage for all future third party motor claims from the 65% level to 100% with the additional 35% coverage financed through an ex-ante industry contribution.

Insurance Industry

Ceisteanna (151, 152, 153)

Michael McGrath

Ceist:

151. Deputy Michael McGrath asked the Minister for Finance the level of engagement between his Department and his Danish counterpart regarding the failure of a company (details supplied); and if he will make a statement on the matter. [53947/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

152. Deputy Michael McGrath asked the Minister for Finance the level of engagement between him and his Danish counterpart regarding the failure of a company (details supplied); and if he will make a statement on the matter. [53948/18]

Amharc ar fhreagra

Michael McGrath

Ceist:

153. Deputy Michael McGrath asked the Minister for Finance the level of engagement between the Central Bank and Danish financial regulators regarding the failure of a company (details supplied); and if he will make a statement on the matter. [53949/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 151 to 153, inclusive, together.

In general terms I do not consider it appropriate for either me or my Department to engage with our counterparts in other Member States on regulatory/supervisory matters as in my role as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation, and have no role in the day to day supervision of insurance companies. However in the case of Qudos because of its rather unique circumstances, my officials have been in touch with their counterparts in the Danish Ministry of Finance.

The Danish Finance Ministry officials advised that as Qudos was in solvent liquidation (as at 10 December), all claims would be met. However, he also indicated that if ultimately Qudos is placed into bankruptcy, and this happens after 1 January 2019, that the Danish Insurance Guarantee Scheme will not be liable to meet these claims due to a legislative change in May 2018. They noted that the decision as to if and when Qudos is placed into bankruptcy is not one for the Finance Ministry and that they have no role in this matter. The Danish officials did indicate that there are no plans to amend the legislation in relation to the Danish Insurance Guarantee Scheme.

It should also be noted that my officials have also been in contact with the UK Treasury and the EU Commission, to set out the impact and importance of this issue for Ireland. UK customers have also been impacted by the failure of Qudos. My colleague Minister of State D’Arcy has met with Insurance Ireland who outlined their serious concerns about the additional cost that Qudos could place on the Irish insurance sector if it is liquidated on or after 1 January 2019.

My officials also continue to liaise with the Central Bank who advise that they are in very frequent contact with its Danish counterpart (DFSA), the supervisory authorities of other affected member states though an EIOPA established Collaboration Platform for Qudos.

I understand that the Danish liquidators are currently continuing their review of the company with a view to determining its underlying financial position. Once this exercise is concluded they will be in a better position to determine whether the company can pay existing claims. It is expected that more information regarding this matter should be available this week.

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