Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

In its latest report, the IMF has pointed out numerous areas in which the Central Bank can increase its supervision and regulatory powers over the insurance sector. We have a very bad reputation for companies passporting into this country, or companies domiciled and operating in this country going bust. As we know, people are picking up the price for that. One of the recommendations suggested by the IMF is that the Central Bank should use its macroeconomic tools to develop its own stress test, in line with the European stress test, to look at extreme but plausible cases and stress them in terms of capital adequacy. The IMF has pointed out that the Central Bank has the power to do certain things it has not done in the past.

I will repeat my original question. When did the Central Bank become aware that, as the former Governor, Professor Honohan, wrote in a letter to the Minister for Finance, companies "built up an unsustainable overhead and followed an imprudent pricing and underwriting approach across most business lines"? According to Professor Honohan, this "resulted in companies' business plans becoming less resilient to downside risks such as an increase in frequency and severity of claims"? He went on to say "in effect, by failing to charge premiums sufficient to cover claims costs and expenses, several Irish general insurance companies have eroded their capital base". The Central Bank is responsible for making sure erosion of the capital base does not happen. I am asking when the Central Bank became aware that insurance companies in Ireland were acting imprudently, which I define as having no due regard to the consequences of their actions.