Insurance (Amendment) Act 2018
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PART 4 Motor Insurers Insolvency Compensation Fund | ||
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Motor Insurers Insolvency Compensation Fund | ||
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16. The Act of 1964 is amended by inserting the following sections after section 3C: | ||
“Motor Insurers Insolvency Compensation Fund | ||
3D. (1) The MIBI shall, on the day that falls one month after the coming into operation of Part 4 of the Insurance (Amendment) Act 2018, establish a fund to be known as the Motor Insurers Insolvency Compensation Fund (in this Act referred to as the ‘MIIC Fund’) for the purpose of payment to the Fund in accordance with this Act of any amount referred to in section 3(5A)(c). | ||
(2) The MIIC Fund shall, subject to the provisions of this Act, be maintained and administered under the control of the MIBI. | ||
(3) The MIBI shall open and maintain a separate account or accounts for moneys paid to the MIIC Fund under this Act. | ||
(4) The MIBI may invest any moneys paid to the MIIC Fund under this Act, which are not immediately required for the purposes of making any payments referred to in section 3E(1), in such manner as its board of directors (or one or more of the members of such board duly authorised in that behalf to do so) may from time to time determine, and such moneys and the income arising from such investment shall be paid into and form part of the MIIC Fund and be available for those purposes. | ||
(5) (a) As soon as practicable, but not later than 31 July in each year, the MIBI shall make a report in writing to the Minister in relation to the performance during the previous year of the functions conferred on it by this Act. | ||
(b) The report referred to in paragraph (a) shall include a statement of at least the following: | ||
(i) the total amount of the contributions paid to the MIIC Fund under section 3F(1)(b) in the year to which the report relates; | ||
(ii) the total amount (if any) paid to the Fund under section 3E(5) during the year to which the report relates; | ||
(iii) the total anticipated amount due to the Fund under section 3(5A)(c) in respect of the current year based on notifications received from the Bank under section 3E(2) during the year to which the report relates; | ||
(iv) the total amount standing to the credit of the MIIC Fund at the end of the year to which the report relates; | ||
(v) the total amount standing to the credit of the MIIC Fund on a date specified in the report that is not earlier than 7 days before the date of the report; | ||
(vi) any amounts due and owing to the Fund pursuant to a notice under section 3E(3) sent by the Bank during the year to which the report relates, and remaining unpaid after the due date; | ||
(vii) the total amount of the expenses referred to in section 3E(1)(b) incurred for the year to which the report relates. | ||
(c) The Minister shall, as soon as practicable, cause copies of the report to be laid before each House of the Oireachtas. | ||
(6) The MIBI shall, not later than 21 days after receipt of a request in writing from the Minister, give the Minister— | ||
(a) a statement in writing of the total amount standing to the credit of the MIIC Fund on a date specified in the statement that is not earlier than the date of the request, and | ||
(b) such information as the Minister may from time to time request as to the performance by the MIBI of the functions conferred on it by this Act. | ||
Payments out of MIIC Fund | ||
3E. (1) The following shall be paid out of the MIIC Fund: | ||
(a) the amount payable out of the MIIC Fund to the Fund under section 3(5A)(c), pursuant to a notice under subsection (3); | ||
(b) before any amounts referred to in paragraph (a) are paid to the Fund, sums to meet the expenses incurred by the MIBI in performing its functions under this Act. | ||
(2) Where a payment is made by the Bank out of the Fund in a case where section 3(5A)(c) applies, the Bank shall notify the MIBI in writing not later than 28 days after making such payment and provide details to the MIBI of the amount so paid in excess of the limitation prescribed by section 3(4) in respect of the claim or claims concerned. | ||
(3) (a) The Bank shall, not later than 3 months after the end of each relevant period, send to the MIBI a notice in writing which shall— | ||
(i) in respect of each such relevant period— | ||
(I) set out a statement of the total amount of the payments notified to the MIBI under subsection (2) during that relevant period, or | ||
(II) where no payment has been notified to the MIBI under subsection (2) during that relevant period, a nil statement, | ||
and | ||
(ii) where applicable, request payment out of the MIIC Fund to the Fund of— | ||
(I) the amount referred to in subparagraph (i)(I), and | ||
(II) any amounts due and owing to the Fund pursuant to a notice under this subsection in any previous relevant period and remaining unpaid after the due date. | ||
(b) For the purposes of paragraph (a), ‘relevant period’ means— | ||
(i) in the case of the first notice under this subsection after the coming into operation of Part 4 of the Insurance (Amendment) Act 2018, the period beginning on the day on which the said Part 4 comes into operation and ending on 30 June next following that day, and | ||
(ii) in the case of each subsequent notice under this subsection, the period of 12 months beginning on 1 July and ending on 30 June next following the immediately preceding relevant period. | ||
(4) The MIBI shall, not later than 28 days after receipt of a notice under subsection (3), determine its ability to pay the amount concerned out of the MIIC Fund, and— | ||
(a) where there are sufficient moneys in the MIIC Fund to pay the full amount concerned, notify the Bank in writing confirming that the full amount shall be so paid, or | ||
(b) where there are insufficient moneys in the MIIC Fund to pay the full amount concerned— | ||
(i) notify the Bank in writing confirming the amount (if any) which it shall pay, and | ||
(ii) notify the Minister in writing of the amount of the shortfall concerned. | ||
(5) The MIBI shall, where a notification has been made under subsection (4)(a) or (b), as the case may be, pay the amount concerned not later than 2 months after receipt of the notice under subsection (3). | ||
Contributions to MIIC Fund | ||
3F. (1) A vehicle insurer shall, not later than 30 June in each year beginning with the year following the year in which Part 4 of the Insurance (Amendment) Act 2018 comes into operation— | ||
(a) subject to subsections (2) and (3), give to the MIBI a statement in writing, certified as to its accuracy by an auditor duly appointed by the insurer in that behalf to do so, setting out the assessable amount— | ||
(i) in the case of the first such statement after the coming into operation of Part 4 of the Insurance (Amendment) Act 2018, in respect of the period beginning on the day on which the said Part 4 comes into operation and ending on 31 December next following that day, and | ||
(ii) in the case of each subsequent statement, in respect of the immediately preceding year, | ||
and | ||
(b) pay to the MIIC Fund a contribution calculated as a percentage of the assessable amount set out in the statement under paragraph (a) at the rate provided for by subsection (4) (in this Act referred to as the ‘percentage rate’). | ||
(2) A statement under subsection (1) shall be in such form as the MIBI may specify, from time to time, and shall include such information, particulars and documentation as the MIBI may reasonably require in order to be satisfied as to the assessable amount. | ||
(3) The MIBI may by notice in writing require a vehicle insurer to give to the MIBI within such period of not less than 7 days as is specified in the notice— | ||
(a) such additional information, particulars and documentation as the MIBI determines for the purposes of this section, and | ||
(b) such evidence as the MIBI may reasonably require in order to verify any information, particulars or documentation given to the MIBI under this section. | ||
(4) The percentage rate shall be— | ||
(a) 2 per cent of the assessable amount, or | ||
(b) in a case where an order is made under section 3G(1)(b), such percentage of the assessable amount as stands specified in such order. | ||
(5) In this section and in section 3G ‘assessable amount’, in relation to a year (or, for the purposes of subsection (1)(a)(i), part of a year) and a vehicle insurer, means the gross premiums paid to the vehicle insurer in respect of all policies issued by it covering risk in the State classified under— | ||
(a) class 10, and | ||
(b) class 10 together with all or any of classes 1(d), 3 and 7, | ||
in Part 1 of Schedule 1 to the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ). | ||
(6) The MIBI shall pay into the MIIC Fund the amount of any contribution received from a vehicle insurer under this section. | ||
Adjustment of percentage rate | ||
3G. (1) The Minister, not more than 3 months after receiving a report under section 3D(5) or a statement under section 3D(6)(a) as to the total amount standing to the credit of the MIIC Fund on the date specified in the report or in the statement, as the case may be (in this section referred to as ‘the relevant amount’)— | ||
(a) shall review the percentage rate, and | ||
(b) may, following consultation with the MIBI and the Bank and subject to subsections (2) to (5), by order specify a percentage rate in lieu of the current percentage rate. | ||
(2) An order under subsection (1)(b) shall take effect from 1 January of the year next following that in which the order is made. | ||
(3) The Minister shall not specify a percentage rate of more than 3 per cent of the assessable amount for the purposes of an order under subsection (1)(b). | ||
(4) Subject to subsection (5), where the Minister makes an order under subsection (1)(b), the percentage rate specified in the order shall be— | ||
(a) save where paragraph (d) applies, 2 per cent of the assessable amount, where the relevant amount is not more than €150 million, | ||
(b) 1 per cent of the assessable amount, where the relevant amount is more than €150 million but not more than €200 million, | ||
(c) 0 per cent of the assessable amount, where the relevant amount is more than €200 million, or | ||
(d) where the Minister has received a notification from the MIBI under section 3E(4)(b)(ii), 3 per cent of the assessable amount until the total amount standing to the credit of the MIIC Fund is more than €50 million. | ||
(5) Subject to subsection (3), the Minister may make an order under subsection (1)(b) specifying a percentage rate other than the percentage rate applicable under any of paragraphs (a) to (d) of subsection (4), as he or she considers appropriate, having regard to— | ||
(a) the relevant amount, | ||
(b) an estimate of the total amount of contributions payable under section 3F(1)(b) before 30 June in the year next following that in which the order is made, based on the total amount of the contributions paid under section 3F(1)(b) as set out in the report under section 3D(5), | ||
(c) any sums due and owing to the Fund pursuant to a notice under section 3E(3), and | ||
(d) the desirability of ensuring that the total amount standing to the credit of the MIIC Fund is likely to be sufficient to meet any payments that may become due to the Fund under section 3(5A)(c). | ||
(6) The MIBI shall publish on its website and by such other means as it considers appropriate notice of the making of an order under subsection (1)(b). | ||
(7) An order under subsection (1)(b) shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order is passed by either such House within the next 21 days on which that House has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done under that order. | ||
Failure to make contribution to MIIC Fund | ||
3H. (1) The MIBI may recover as a simple contract debt, in any court of competent jurisdiction, from a vehicle insurer by which it is payable the amount of any contribution due and owing to the MIIC Fund under section 3F(1)(b). | ||
(2) (a) The MIBI shall, if a vehicle insurer does not make a contribution to the MIIC Fund under section 3F(1)(b), notify the Bank in writing of the name and address of the vehicle insurer. | ||
(b) A notification under paragraph (a) shall include— | ||
(i) particulars of any steps taken by the MIBI to recover the amount of the contribution concerned, including documentary evidence of any such steps so taken, and | ||
(ii) a copy of any order of the court obtained pursuant to subsection (1). | ||
(3) Where the Bank receives a notification from the MIBI under subsection (2), the Bank may require the MIBI to provide such further information, as the Bank considers necessary and appropriate, in relation to the failure of the vehicle insurer to make the contribution to the MIIC Fund under section 3F(1)(b). | ||
(4) In the case of a vehicle insurer (other than a vehicle insurer which is an insurer authorised in another Member State), where the Bank receives a notification under subsection (2), the Bank may, on giving notice in writing of not less than 21 days to the vehicle insurer by which the contribution to the MIIC Fund under section 3F(1)(b) is payable, suspend its authorisation until the Bank is satisfied that all such contributions to the MIIC Fund payable by the vehicle insurer under section 3F(1)(b) have been paid. | ||
(5) In the case of a vehicle insurer which is an insurer authorised in another Member State, where the Bank receives a notification under subsection (2), the Bank may inform the authority in that Member State charged by the law of that Member State with the duty of supervising the activities of insurance undertakings in that Member State (in this section referred to as ‘the supervisory authority’) that it has received such a notification. | ||
(6) If a vehicle insurer referred to in subsection (5) persists in its failure to pay the contribution to the MIIC Fund under section 3F(1)(b), despite any measures taken by the supervisory authority or because those measures prove to be inadequate or are lacking in that Member State, the Bank may, after informing the supervisory authority and on giving notice in writing of not less than 21 days to the vehicle insurer, in the exercise of its powers under financial services legislation, take appropriate measures to prevent further failure, including preventing that vehicle insurer from issuing any policies referred to in the definition of ‘vehicle insurer’ in section 1. | ||
Offence of failing to make contribution to MIIC Fund | ||
3I. (1) A vehicle insurer that does not make a contribution to the MIIC Fund under section 3F(1)(b) is guilty of an offence and— | ||
(a) is liable on summary conviction to a class A fine or to imprisonment for a term not exceeding 12 months or to both, or | ||
(b) is liable on conviction on indictment to a fine or to imprisonment for a term not exceeding 5 years or to both. | ||
(2) Where an offence under this section is committed by a body corporate and it is proved that the offence was committed with the consent or connivance, or was attributable to any wilful neglect, of a person who, when the offence was committed, was a director, manager, secretary or other officer of the body corporate, or a person purporting to act in that capacity, that person, as well as the body corporate, is guilty of an offence and may be proceeded against and punished as if he or she were guilty of the first-mentioned offence. | ||
(3) Where the affairs of a body corporate are managed by its members, subsection (2) applies in relation to the acts and defaults of a member in connection with his or her functions of management as if he or she were a director or manager of the body corporate. | ||
(4) Summary proceedings for an offence under this section may be brought and prosecuted by or on behalf of the Bank. | ||
Liability for acts, omissions, etc. | ||
3J. Any person who is or was a director, or other officer or employee, of the MIBI shall not be liable in damages for anything done, anything purported to be done or anything omitted to be done by that person in performing functions conferred on the MIBI by this Act unless the act or omission is shown to have been in bad faith.”. |