Thursday, 7 February 2019

Ceisteanna (76)

Michael McGrath


76. Deputy Michael McGrath asked the Minister for Finance the compensation mechanisms in place if after the UK leaves the EU an insurance company operating here under freedom of services but prudentially regulated in the UK or Gibraltar goes into liquidation; the way in which the Insurance (Amendment) Act 2018 applies in this scenario; if claimants in this instance would be entitled to 100% compensation; and if he will make a statement on the matter. [6179/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Irish Insurance Compensation Fund (ICF) was established under the Insurance Act 1964, (as amended) and operates as a host-based insurance guarantee scheme. This means that it is designed to facilitate payments due under a policy in relation to risks in the State where an Irish authorised non-life insurer or a non-life insurer authorised in another EU Member State goes into liquidation.

Once the UK leaves the EU, an insurance company regulated in the UK or Gibraltar, will no longer be able to write new insurance contracts in Ireland under freedom of services. If such companies wish to write new business here, they will need to obtain a relevant authorisation in Ireland, or another EU member state under the EU insurance regulatory framework.

The Miscellaneous Provisions (Withdrawal of the United Kingdom from the European Union on 29 March 2019) Bill 2019 , contains proposals which if enacted, will ensure that UK or Gibraltar authorised insurers will be deemed to have a limited authorisation for a period of three years after withdrawal. This will therefore allow policies written prior to Brexit in relation to risks in the State come under scope of the ICF subject to the terms and conditions of the Fund.

The Insurance Act 1964 (as amended) currently provides that claimants can be compensated by the ICF for 65% of the claim or €825,000, whichever is the lesser. However, in the case of third party motor insurance claims, the Insurance (Amendment) Act 2018 provides that the level of compensation from the ICF is increased to 100%, with the additional coverage financed by the motor insurance industry through the establishment of an ex-ante fund into which industry will make regular contributions.