Michael McGrath (Cork South Central, Fianna Fail)
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212. To ask the Minister for Finance if he expects further repayments from the insurance compensation fund to the Exchequer; and if he will make a statement on the matter. [22633/16]

Michael Noonan (Limerick City, Fine Gael)
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The establishment of the Insurance Compensation Fund (ICF) is provided for by the Insurance Act 1964. It applies to home, motor and commercial insurance. The purpose of the ICF is to protect policy holders in the event of their insurer becoming insolvent or to allow the administrators of an insurance company to meet their financial obligations as they arise. The management and administration of the ICF is under the control of the President of the High Court acting through the Office of the Accountant of the Courts of Justice. 

The Central Bank of Ireland has responsibility under Section 6 of the Insurance Act 1964, as amended, to carry out an annual assessment of the ICF to see if it needs financial support. Where the Central Bank is of the view that the state of the ICF is such that financial support should be provided for it, it is allowed to determine an appropriate contribution to be paid to the ICF by each insurer. This is calculated as a percentage determined by the Central Bank, not exceeding 2 per cent of the aggregate of the gross premiums paid to the insurer or insurer authorised in another Member State in respect of policies issued in respect of risks in Ireland. If the Central Bank envisages a deficit may exist in the fund at any time in the calendar year after the contributions received from each insurer, it may recommend to me, as Minister for Finance, to advance funds to the ICF from the central fund. This advance would be a loan and must be repaid to the Exchequer, with interest.  

At present, the balance owed to the Exchequer by the ICF is €812.3m. Since approximately €65-70m is collected each year under the 2% levy, it will take several years for the ICF to collect and repay the amount owed. 

It should be noted that included in the estimate for capital resources for 2016 is a receipt of €50 million from the Insurance Compensation Fund(ICF) to the Exchequer. The estimate of Exchequer receipts from the ICF during 2016 was updated to €100 million as part of the preparation of the fiscal forecast contained in the Stability Programme Update. The estimate of €100 million is made up of 2 receipts of €50 million each, the first expected during the third quarter of this year and the second receipt expected close to the year end.

Estimates of future Exchequer receipts from the ICF may be revised again, pending an updated forecast of the cash requirements of the ICF, as part of the Budget 2017 fiscal forecast.