Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

In reply to Deputy Michael McGrath's question, the Central Bank has the power to stop any insurance company from issuing new products. It is well aware of this issue and I am confident that it will deal with any insurance policies being issued that does not have full consumer protection and a legal underpinning.

Deputies Michael McGrath and Pearse Doherty asked about our assessment of readiness in the industry and the products that are not covered by this legislation. I have discussed this issue with the Central Bank whose judgment is that the overwhelming majority of insurance companies have now taken all the necessary steps to reorganise their affairs, if they had not already done so, in order to be compliant in the event of a very hard Brexit taking place in a number of weeks. However, a very small minority of companies may still not have taken the necessary action.

Deputy Pearse Doherty asked for an indication of the size of the market represented by these companies and the estimate is that they equate to 2% of the Irish gross written premium that was written by UK and Gibraltar insurers between 2011 and 2017. It is a very small share that we judge might not yet be ready but, of course, even if the share of business is low, that is of no solace to consumers who might find themselves in a very difficult situation.

On the question of consumer risk, if and when the Oireachtas ratifies this section, we do not believe there would be a consumer risk. Our analysis is that we will have dealt with the potential for a consumer risk to develop. Deputy Pearse Doherty also asked why we opted for a three year period. We were just trying to get the balance right. We wanted to provide enough time for consumers who have policies that they bought in good faith to allow those policies to conclude and to get new policies to replace them. We felt that three years was enough time to allow consumers to get their affairs in order but not so long that it might offer an inducement for no change by consumers.

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