Dr. Colm O'Reardon:

The Chair makes the point that the Quinn situation was particularly exceptional. The idea of an insurance compensation fund goes back to the 1960s. There is an expectation that these kinds of things can happen and there has to be an arrangement in place to deal with them. The reason for that is to protect policyholders for when these things arise. There have been reforms with the Solvency II rules meaning that insurance companies have to provide greater degrees of reserves.

A European Commission proposal for an insurance recovery and resolution directive is making its way through that process. Such a directive would strengthen the arrangements to improve the situation when these things arise. To go back to the point my colleague from the Central Bank is making, we cannot anticipate a situation where there will not be insurance insolvencies but improvements are being made.