Seán Barrett (Dún Laoghaire, Fine Gael)
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Question 118: To ask the Minister for Finance the plans he has to remove the insurance levy which was introduced in the 1980s as a result of the financial difficulties experienced by some insurance companies; his justification for the continuation of this insurance levy; and if he will make a statement on the matter. [24348/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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An insurance levy was introduced in 1984 requiring contributions of 2% of gross premium income to be made to the Insurance Compensation Fund to meet the liabilities arising from the collapse of PMPA. The levy was paid by all non-life insurers at this rate until 31 December 1991 when the rate was reduced to 1%. The levy ceased to apply from 1 January 1993 as there were sufficient funds to complete the administration of Primor Plc, the former PMPA.

Stamp duty of 1 per cent was imposed on certain insurance premiums in 1982. This was increased to 2% in 1993. The stamp duty is imposed on almost all non-life insurance premiums, the exceptions being reinsurance, voluntary health insurance, marine, aviation and transit insurance and export credit insurance. Similar levies exist in other EU countries. The stamp duty on non life insurance was introduced to broaden the stamp duty base and is paid into the Central Fund along with other tax receipts.