Fianna Fáil Finance Spokesperson Michael McGrath has said he is deeply concerned at reports that the anticipated bill for plugging the hole left by the former Quinn Insurance company could reach €1.2 billion despite an estimate by Government last year that the bill would be €738 million.
Deputy McGrath stated, “Last September, the Minister for Finance Michael Noonan advised Dáil Éireann that the estimated call on the Insurance Compensation Fund arising from the problems at Quinn Insurance would amount of €738 million. To fund this, the Government introduced the Insurance (Amendment) Act 2011 to impose a 2% levy on all insurance policies except for health and life insurance for an indefinite period. This 2% levy took effect on 1 January 2012 and was applied, for example, to home, motor and commercial insurance policies.
“During the Dáil debate, I pointed out to the Minister that, by not including a sunset clause in the legislation, the Government was giving an open-ended commitment and that, despite the Government referring to it as a levy on the insurance industry, ordinary insurance policyholders would have to pick up the bill. When the levy was introduced, the Minister said it would be likely to be in place for 11 or 12 years.
“We are now led to believe from media reports that the administrators of Quinn Insurance Limited will tomorrow advise the High Court that the costs associated with the company’s administration have increased to between €1.1bn and €1.2bn. In addition, we have no certainty that the bill will end there. The levy is now expected to be in place for 15 years or more.
“People all over the country are fascinated at the events unfolding at the High Court concerning the enormous debts owed by the Quinn family to the State-owned IBRC. We would all do well to remember that the fallout from the collapse of the Quinn business empire is not a victimless episode. The insurance levy that will be applied to ordinary insurance policyholders for the next decade and a half or more is a further stark reminder of that.”