Brian Lenihan Jnr (Dublin West, Fianna Fail)

First, with regard to the suggestion, which I understand was made in a press release circulated on behalf of the Quinn Group, that this was a highly aggressive and unnecessary action which endangers jobs, I make it clear that the regulator is acting in the proper performance of his functions. That is what I and, I am sure, every Member of this House would expect him to do.

The regulator has to ensure in a regulated industry of this character that the industry is being operated in a manner that can assure the policyholders their claims will be met. That is an absolute duty which he is under. This is not the first but the second occasion on which a difficulty of this type has emerged in regard to this insurance company. Whatever we disagree about, in the context of yesterday's debate, there is a particular onus on the regulator to ensure a regulated industry like this meets whatever statutory standards are laid down. Everything he has done in this context is to ensure those statutory standards are upheld. That is my response on that issue.

In regard to the previous operation of the insurance compensation fund, the Insurance Corporation of Ireland, a subsidiary of Allied Irish Banks, collapsed in 1985. The ICI has since been renamed Icarom plc. Compensation to meet certain of Icarom's liabilities has been provided through the insurance compensation fund by a combination of AIB funding, commercial loans and State loans, which have been since repaid.

The collapse of the ICI did not require a levy on the industry itself. The collapse of the PMPA, on the other hand, did involve a certain element of levy. The Insurance Act 1964 made provision for contributions to be made to the insurance compensation fund from insurers, other than insolvent insurers, to meet the liabilities of insolvent insurers. This provision was brought into effect by section 10 of the Insurance (No. 2) Act 1983 and set the levy at 2% of gross premium income. It was introduced on 1 January 1984 following the collapse of PMPA in October 1983. At that time, there were not sufficient moneys in the fund to meet the liabilities of PMPA. The levy was paid by all non-life insurers at this rate until 31 December 1991. The rate was reduced to 1% from 1 January 1992 to 31 December 1992. The levy ceased to apply from 1 January 1993 as it was felt sufficient funds had been collected to enable the successful completion of the administration of the former PMPA.

The position here is somewhat different in that we are at the stage where an interim appointment has been made returnable on notice to the court and, clearly, there is no call on the need for a levy at this stage. When the administrator has conducted a preliminary view of the company in question, we will be in a better position to know exactly how to proceed.

In regard to the question of health insurance, I am advised that health insurance and marine, aviation and transit insurance are excluded from the operation of the levy.

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