Richard Bruton (Dublin North Central, Fine Gael)
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Question 99: To ask the Minister for Finance if pensioners who are forced to purchase annuities on reaching retirement enjoy any protection against default by insurance companies providing those products; if legislative changes to protect annuities or to remove the obligation to purchase annuities is now appropriate. [37756/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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There is no compensation scheme in place in Ireland in the event of a default of a life assurance undertaking. The Deputy should be aware that the Financial Regulator's insurance supervision unit works closely with Irish insurance companies to ensure that they maintain capital requirements and manage their risks effectively. Prudential supervision has proven to be a most effective safeguard of the interest of policyholders and regulatory oversight of the insurance sector has been stepped up in recent times by the Financial Regulator.

At EU level only a few Member States have insurance guarantee schemes and an EU Commission working group has indicated that while a majority of Member States are in favour of some European co-ordination of insurance guarantee schemes, there is no consensus on the extent or content of such co-ordination. The EU Commission has subsequently contracted the consultants OXERA to conduct a study on insurance guarantee schemes in the EU both for life and non-life insurance (excluding motor insurance). The resultant report entitled 'Comparative analysis of existing schemes, analysis of problems and evaluation of options' was published in early 2008. The Commission has consulted with the various stakeholders in May — July 2008, so as to provide them with the opportunity to comment on the main findings of OXERA's report and to make known their views on the desirability and feasibility of Community action in this area. In addition to collecting written comments, the Commission has held a public hearing on insurance guarantee schemes in June 2008. The Commission has committed itself to take account of the results of this consultation when making its policy decision on the way forward.

I am aware of the difficulties for certain individuals, particularly members of defined contribution schemes, who are retiring in current market conditions and who are required to purchase an annuity on retirement at this time. I am examining this matter and will be consulting with industry interests to establish its extent and what, if anything, can be done to alleviate it.