Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael) | Oireachtas source

I thank Deputy Dillon for the question. It is important to note there are various levies and contributions in existence on insurance premiums. These serve different and quite defined purposes. The 2% insurance compensation fund levy represents the only pure levy charged on insurance premiums. It covers the cost of claims in the State where an insurer goes into liquidation. The ICF was established under the Insurance Act 1964. To recoup the Exchequer funds advanced following the administration of Quinn Insurance, the 2% levy on all non-life insurance premiums was reintroduced in 2012. Revenue collects this, transmitting these funds to the Central Bank of Ireland, which administers the ICF under the Insurance (Amendment) Act 2018. The Revenue Commissioners have informed me that recent annual industry contributions were €93 million in 2021, €101 million in 2020 and €130 million in 2019.

In terms of reviewing the rate, the Central Bank carries out an annual assessment of the ICF's financial position, which is issued to the Minister for Finance. The most recent Central Bank audited figures to the end of 2021 indicated that the balance on the loan was €550 million. While this has decreased in the interim, owing to the outstanding amount, the levy is likely to be applied for the next number of years.

Additionally, the motor insurers insolvency compensation fund, MIICF, is a contribution equivalent to 2% of gross motor premiums, established under the Insurance (Amendment) Act 2018. This ensures compensation levels payable from the ICF for third party motor insurance claims as a result of an insolvency are aligned with that where a motorist collides with an unidentified or uninsured driver. The MIICF is not considered a levy as discretion rests with the insurance companies as to its financing. Under the legislation, the rate will fall to 1% when the fund reaches €150 million and then 0% once the fund reaches €200 million. The fund balance at 31 December 2021 was approximately €110 million.

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