Currently, under the Insurance Act 1964, all policyholders of Irish authorised firms are covered by the ICF, whether they are located in Ireland or other EU member states. The legislation also provides that all such companies are required to be levied whenever there are insufficient funds in the ICF to meet a particular demand such as the Quinn Insurance Limited deficit. However, because of changes in EU law since the fund was last used, it was necessary to get legal advice on the application of the ICF levy. In particular, Article 46 of the third non-life insurance directive - 92/49/EEC - precludes a member state from applying an indirect tax or parafiscal charge on insurance risks outside of its jurisdiction; therefore, the 1964 Act was in contravention of this provision. My Department sought legal advice from the Attorney General on this issue and she concluded that if a levy was applied on insurance companies on risks outside the State in the context of an administration or a liquidation, this would appear to infringe Article 46.2 of the directive. In the light of this, she concluded that a levy could only be applied in respect of those risks located in Ireland. A consequence of this is that we cannot apply the ICF levy to international risks; therefore, our legislation must be changed to reflect this position, thus explaining the amendments being made in this Bill to Article 6 of the 1964 Insurance Act.