Jack Chambers (Dublin West, Fianna Fail)
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214. To ask the Minister for Finance the steps he will take to ensure no additional levies will be charged to cover the cost of the recent court ruling regarding an insurance company (details supplied); and if he will make a statement on the matter. [26813/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The failure of Setanta Insurance and the uncertainty that followed over the compensation arrangements for claimants created doubts around the current insurance compensation framework which has now been clarified by the Supreme Court. 

However, there has been a general view that consideration should be given to ensuring 100% third party payments in any future motor insurance insolvencies, whatever the outcome of the Setanta appeals process.

This led to the Review of the Framework for Motor Insurance Compensation in Ireland – a report which was issued by a Joint Working Group led by the Department of Finance and the Department of Transport, Tourism and Sport in June 2016. It recommended that the level of cover for third party motor insurance claims should be increased from 65% to 100% and that while the ICF will pay out the amount due in full, it will receive from industry a contribution to cover the additional 35%.  To meet this 35% contribution, industry has proposed the establishment of an ex-ante fund into which they would make a contribution equivalent to 2% of gross motor insurance premiums. Such a fund once built up would allow them meet their obligations.

This approach will ensure that industry shares the burden of the additional costs associated with increasing the level of coverage of the ICF and at the same time it creates predictability and certainty for industry as to their exposure for financing insolvencies. It also maintains the attractiveness of Ireland for new entrants. This approach will allow companies the option to choose to absorb this additional cost i.e. to finance this contribution through absorbing it themselves fully or partly as an alternative to passing it onto consumers. 

It is intended that Heads of a Bill to amend the Insurance Act 1964 will be brought to Government for approval by the end of this month.