Insurance levy reform proposed

The recently proposed Insurance (Amendment) Bill has suggested that a two per cent levy be added to insurance policies to provide funds that can be used in the event of an insurance company’s collapse.

The Bill provides for the transfer of the Insurance Compensation Fund to the Central Bank and will create a Motor Insurers Insolvency Compensation Fund to make provision for any future failures, according to media reports.

The legislation anticipates the levy being in place for at least seven years as it seeks to build reserves of EUR200 million.

Minister of state for finance Michael D’Arcy said that if there is no call on the funding prior to it building to its target level of EUR200 million,” it is anticipated the process would take approximately seven years.

He said that at the two per cent level, the contribution is expected to collect approximately EUR34 million to EUR40 million per annum for approximately four years.”