Áine Collins (Cork North West, Fine Gael)

I welcome the opportunity to speak on this Bill and thank the Minister for introducing it. It deals with vital changes to current legislation for the insurance industry, bringing much needed clarity, as well as bringing Irish legislation into line with EU legislation.

Reference was made to the urgency with which the Bill was brought to the House. The need for the legislation is unquestioned, both to comply with EU law, as well as the obvious need to facilitate the imminent sale of Quinn Insurance to Liberty Mutual Direct Insurance Company Limited. There are 1,600 jobs at stake and in the current times, those employees must priority.

I welcome the clarity the amendments in the Bill brings to the risks covered by legislation and the scope of the cover provided by the insurance compensation fund. I am glad the Minister has chosen to exempt health insurance from the proposed 2% levy. I know of many people who are struggling to maintain their health insurance policies and many of them have opted not to renew their policies. An extra 2% on those policies would have the unwanted result of many more policies being cancelled. It is most unfortunate, however, that the Insurance Compensation Fund does not have adequate resources to meet the liabilities incurred, primarily by Quinn Insurance. The necessity to introduce this 2% levy on non-life insurance policies is saddening. Once again, the many are paying for the mistakes of the few.

Greed and lack of regulation combined to bring us to this situation. What is most galling is that lessons do not appear to have been learnt from previous mistakes in this sector. It is almost 30 years since the collapse of the Private Motorists Protection Association, PMPA, which was brought about by providing cheap insurance without sufficient funding to back up claims. No sooner had the taxpayer begun to adjust to bearing the financial brunt of that collapse than Insurance Corporation of Ireland, ICI, also ran into severe difficulties and its owner, Allied Irish Bank, had to be bailed out, so to speak, by the Government of the day. There are alarming echoes of the past in what the Government is faced with today. The introduction of this 2% levy is exactly what happened after the collapse of PMPA.

Quinn Insurance managed to combine the previous mistakes by providing too cheap insurance without sufficient funds to cover claims while also overextending itself in the UK market, leaving the burden of covering its losses with its clients and the clients of other insurance providers. It is incredible that the Quinn Insurance website, right up the day of this debate, claims as a positive attribute that it is the company that has driven down the cost of insurance in Ireland and gained a reputation for value, customer service and innovation. The company may have driven down the cost of insurance on its entry to the marketplace in 1996, but at what cost? The concept of customer service espoused by Quinn Insurance has now, unfortunately, extended its reach to all non-life insurance policyholders right the country, with the imposition of this 2% levy.

Once again, we find ourselves reliving history. The real question is, shall we learn from it. To that end, I welcome the Minister's efforts in addressing the need to strengthen regulation of the insurance sector and I am pleased to note that the Central Bank has doubled its staff resources in this area to more than 100. I also look forward to the strengthening of regulation on an international level, especially the forthcoming EU Solvency II Directive.

I welcome the Bill and the clarity it brings and I commend it to the House.

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