Mr. Raymond O'Rourke:

Normal businesses that are selling and trading have to follow European law, but all the establishment and everything is really up to member states. I think the committee could make a statement in this area. My mother was an insurance broker many years ago when PMPA went to the wall and a compensation fund had to be introduced. The legislation in Ireland is very strong. The committee could argue that it wants this to continue and therefore could propose that any business which operates in this country, regardless of whether it is passporting, must link in with a compensation fund. Gibraltar does not have such a fund. There are issues about whether it should link in with the fund here. The committee could propose that nobody should be allowed to sell insurance in this country without being able to demonstrate that it is linked in with a compensation fund. Members might be concerned that Brussels would not allow such an approach to be pursued, but I am of the view that Brussels will allow it as long as people are not locked out of markets and the rules of the Single Market are respected. Nobody will be locked out if the approach I am suggesting is chosen. Ireland gives an extra protection to its consumers because there is a history in the Irish marketplace of companies going to the wall.

I am always amused to hear public bodies emphasising the need to shop around. The Financial Regulator used to say this and now the Competition and Consumer Protection Commission is saying it. Consumer lawyers think shopping around is great because it allows people to get the product, etc., but one does not find out whether that product is worth what it should be worth until things go wrong. That is the sad thing about a large number of the 11 Gibraltar companies and the Malta companies that have come in. When a company like that comes in, it is great for a while because it gives people cheap insurance or does stuff for farmers, young people or women. When it suddenly hits the fan, everybody stands back and says nothing can be done because the matter is so complex. I suggest that something can be done by demanding that there is always a compensation fund for motor insurance companies in Ireland. That should apply regardless of whether the company is Finnish, Swedish or Greek. We need to provide that when a insurance company comes into the Irish market, it needs to have a compensation fund. I do not believe such a requirement would cause any problems in Brussels because its aim would be to protect consumers.