Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

This might provide the opportunity for the Minister of State to address some of the points made on Second Stage. Will the Minister of State clarify why he is going for an additional new fund, as opposed to extra contributions going into the existing insurance compensation fund, ICF? We are setting up a motor insurers insolvency compensation fund but will the Minister of State explain the logic behind that given the ICF is designed to deal with the fallout from the failure of an insurance company? There is the question of the need for an extra fund and why it is not being dealt with in the existing structure of the ICF.

A new levy will be put in place on insurance policies. My understanding is that once the amount accumulates to €150 million, the rate will reduce to 1% from 2%. Will the Minister of State clarify how quickly he expects the levy to be applied? I am sure he will say it is a matter for insurance companies how it is collected but in reality this will be passed to policyholders. At a rate of 2%, it should collect in the region of approximately €70 million per year. After two years or so will the 2% become 1%, and after a further year will that become zero? Is it correct that in total there will be approximately three years where the levy is applied to reach the €200 million or so, meaning the levy will no longer be collected? It would be helpful if the Minister of State could clear up some of those matters.

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