Motor Insurance Insolvency Compensation Act 2024

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Contributions to Fund by insurers (domestic) carrying on motor third party liability insurance in other Member States

26. The Act of 1964 is amended by the insertion of the following section after section 2:

“2A. (1) (a) Subject to paragraph (b) and subsections (2), (3) and (4), the Minister may, after consultation with the Bank, by regulations prescribe requirements for insurers (domestic) which carry on motor third party liability insurance in other Member States as regards contributions to the Fund for the purposes of providing eligible compensation.

(b) Regulations (if any) made under this subsection may empower the Bank to establish a sub-fund of the Fund into which contributions referred to in paragraph (a) shall, unless otherwise prescribed in circumstances set out in the regulations, be paid and, if such sub fund is established, any sums paid out of the Fund for providing eligible compensation shall be paid out of the sub-fund unless there is an insufficiency of moneys standing to the credit of the sub-fund in which case other moneys standing to the credit of the Fund may be used to cover the insufficiency.

(c) Where a sub-fund referred to in paragraph (b) is established—

(i) references in this Act, the Act of 2024 or any other enactment to a sum being paid out of the Fund (howsoever expressed) shall, with all necessary modifications, be construed to take into account the effect of that paragraph and the regulations made under this subsection relating to the sub-fund, and

(ii) moneys standing to the credit of the sub-fund shall not be used for any purposes other than the following:

(I) providing eligible compensation;

(II) covering the costs and expenses incurred by the Compensation Body in providing eligible compensation;

(III) covering the costs and expenses incurred by the Bank in performing its functions under this Act in respect of the maintenance and administration of the sub-fund;

(IV) covering the costs and expenses incurred by the State Claims Agency in performing its functions under the Act of 2024;

(V) repayment of moneys borrowed for the sub-fund and payments of interest on such moneys;

(VI) other sums properly payable out of the sub-fund.

(d) Regulations made under this subsection may provide for the steps to be taken where a contribution referred to in paragraph (a) is not paid by an insurer (domestic) in accordance with this section and the regulations.

(2) (a) Subject to paragraph (b) and subsections (3) and (4), the Minister may, after consultation with the Bank, in regulations made under subsection (1), prescribe the appropriate contribution referred to in subsection (1) together with the terms of payment of such contribution.

(b) The rate of such contribution shall be set at a level which, in the opinion of the Minister, is appropriate having regard to the level of risk to which the Fund is exposed by virtue of section 6 (2) of the Act of 2024.

(3) The Minister shall, in making regulations under subsection (2), have regard to—

(a) any recommendations made by the Bank in the consultation referred to in subsection (2)(a), and

(b) the following:

(i) the total amount of moneys currently standing to the credit of the Fund;

(ii) the sums (if any) due and owing to the Fund;

(iii) the desirability of ensuring that the total amount of moneys standing to the credit of the Fund is likely to be sufficient to meet payments that may become due to the Fund;

(iv) the likelihood of a call on the Fund;

(v) any sums advanced to the Fund under subsection (7);

(vi) such other factors as the Minister considers appropriate and, in particular, the likely impact that such regulations may have on insurers (domestic).

(4) Regulations made under subsection (1) shall come into operation on 1 January next following the year in which the regulations were made.

(5) The Minister shall, in regulations made under subsection (1), appoint, as collector for the purposes of this section and the regulations, the Bank, the Revenue Commissioners or any other person who, in the opinion of the Minister, has the requisite knowledge, expertise and experience to perform the functions of the collector for such purposes.

(6) The Minister may, after consultation with the Bank, by regulations prescribe operational and governance requirements as regards contributions referred to in subsection (1).

(7) Every regulation made by the Minister under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which the House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(8) Regulations made under this section may contain such incidental, supplementary and consequential provisions as appear to the Minister to be necessary or expedient for the purposes of the regulations.

(9) For the avoidance of doubt, it is hereby declared that the Bank may make recommendations in the consultation referred to in subsection (2)(a).

(10) Section 2 of the Act of 2024 shall apply to the interpretation of this section and regulations made under this section as that section applies to the interpretation of that Act.

(11) In this section, ‘eligible compensation’ means compensation referred to in section 6 (2) of the Act of 2024.”.