Dr. Cyril Roux:

The overall proposal is a combination of elements. One element is that the insurance compensation fund would cover the claims in full. As the Senator knows, the insurance compensation fund would cover up to 65% of a claim or up to €825,000, whichever is the lower. The first building block of the Government's proposal is to ensure the insurance compensation fund now would cover 100% of claims. While it would increase consumer protection, it would be paid for with an increased levy.

The Government's alternative financing arrangement for the extra 35%, which would be added to actual insurance compensation fund, would have MIBI pay for it. The committee has heard the objection of the insurance industry about having to bail out their competitors for the consequences of them failing. Insurance Ireland stated to the committee that it is like Dunnes Stores bailing out Tesco.

There is a balance of view. It is the Government's decision whether or not to impose that 35% extra cost directly on the insurance industry - what the industry claims it would do it for them - or through an alternative route. There are pros and cons for several options. We will operate whatever the Government decides.