Joanna Tuffy (Dublin Mid West, Labour)
Link to this: Individually | In context

Question 113: To ask the Minister for Finance his views on declines in the solvency situation of insurance companies based here; and if he will make a statement on the matter. [18975/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The position under EU law is that both life and non-life insurers must maintain solvency equal to the higher of a fixed Minimum Guarantee Fund or a Required Minimum Solvency Requirement (based on premiums or claims depending on circumstances). In addition to these EU mimima, the Financial Regulator requires that firms maintain solvency of 150% of the Required Minimum Solvency Requirement (200% in the case of newly authorised firms).

My Department has been advised by the Financial Regulator that firms often choose to maintain solvency well in excess of the requirements. In summary therefore, Irish authorised insurers maintain their solvency at safe levels and this is borne out in international comparison. The Financial Regulator has acknowledged that solvency has shown some decline in the last year. However, this is to be expected in the face of the ongoing economic and financial turbulence. Nevertheless, the Regulator is satisfied that the Irish insurance industry continues to maintain a strong solvency position.

Finally, it should be noted that the Financial Regulator has been monitoring insurance firms very closely and continues to do so. The recent introduction of a new quarterly, electronic reporting system for insurance firms has greatly assisted in this regard.