Preasráitis
Motor Insurers Insolvency Compensation Fund levy to be reduced from 1% to 0%
Foilsithe
An t-eolas is déanaí
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Foilsithe
An t-eolas is déanaí
Teanga: Níl leagan Gaeilge den mhír seo ar fáil.
Minister for Finance Jack Chambers and Minister of State for Financial Services, Credit Unions and Insurance Neale Richmond welcome an order reducing the Motor Insurers Insolvency Compensation Fund levy from 1% to 0%. It was signed in October and will come into effect on 1 January 2025.
Minister for Finance Jack Chambers commented:
“The Motor Insurers Insolvency Compensation Fund is an important protection mechanism for Irish motorists. It ensures that in the event of a motor insurer going into liquidation, outstanding claims can still be funded. Since its initiation in 2018, the fund has now reached a level where it can be suspended. Therefore, I am pleased to have signed the order confirming a reduction in the levy from 1% to 0%.
"This reduction will benefit all motor insurance policy holders on renewal in January 2025. With the current cost of living challenges, this is certainly a welcome change. The reduction in the annual percentage rate will reduce the level of motor insurance contributions by approximately €20 million next year and in turn have a direct and positive impact on the cost of insurance for motorists.”
Minister of State for Financial Services, Credit Unions and Insurance Neale Richmond commented:
“I am pleased that, from 1 January 2025, this levy has been reduced to 0%. This policy decision complements the deep and wide ranging reforms to the insurance industry, via the Action Plan for Insurance Reform, and marks the successful capitalisation of this pro-consumer fund.
“Following the announcement of this reduction in Budget 2025, I have reiterated to the CEOs of motor insurance companies the expectation that the insurance industry will offer value for money to consumers and that the reduction should be fully reflected in the cost of motor insurance policies from 1 January 2025.”
The Motor Insurers Insolvency Compensation Fund (MIICF) is an ex-ante fund established in 2018 to collect contributions from motor insurers in order to fund the increase in compensation for third party motor claims from 65% to 100% in cases where an insurer is insolvent.
The objective of the MIICF is that the compensation levels payable from the ICF for third party motor insurance claims as a result of a motor insurer insolvency are equivalent to the compensation levels paid out by MIBI if a motorist is involved in a collision with an unidentified or uninsured driver.
The 2018 Act requires motor insurers to contribute a set percentage of gross written motor insurance premiums annually to the MIICF until the Fund reaches €200 million. At that stage, contributions are to be suspended (0%) until there is a call on the Fund. The contribution rate is subject to annual review by the Minister for Finance, and can be set between 0% and 3%, depending on factors such as the amount in the Fund, or the likelihood of a call being made on it.