Michael Noonan (Limerick City, Fine Gael)

Section 7 replaces section 6 of the Insurance Act 1964. The section sets out the conditions for the levying of insurance companies in relation to the Insurance Compensation Fund. The provision sets out a number of elements including the following - the Central Bank continues to be responsible for assessing the fund from time to time to see if it needs financial support. In addition, it determines the levy to be placed on insurers where funding is required and notifies them. The Minister for Finance is provided with power to appoint a collector to collect the levy who will pass on the levy to the Insurance Compensation Fund. The collector will inform the Central Bank where no payment is made. The collector is the Revenue Commissioners.

The Central Bank will continue to be responsible for enforcement in the event of non-payment of the levy. The levy is required to be reviewed regularly. All insurance companies will be levied in respect of risks in the State under the new scheme. This contrasts with the existing scheme under which only Irish authorised insurances are levied. However, in that scheme, they are levied in respect of risks inside or outside the State. The levy will be collected by the Revenue Commissioners.

Deputies may be aware, because they were probably lobbied by the insurance industry, that in the early stages of drafting this legislation it looked as if the levy would have to apply to all business written in Ireland, even if the insured persons or assets were outside of the State. There was a serious threat to major insurance companies who had written much of their business across the Continent of Europe, particularly in Germany. There was a potential loss of 1,500 or 1,600 jobs arising from this and it was one of the reasons we needed to scrutinise it so carefully in Europe and come up with a formula to ensure that in protecting the jobs of this company that we did not lose the jobs in very significant insurance companies in this city who write a lot of business from the financial services centre in respect of risk outside the State.

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