New Irish insurance premium tax levy following Quinn failure

A Bill was passed by the Irish parliament last year imposing a 2% levy on insurance premiums.  This was on top of the existing Government Levy of 3% on non-Life policies. 

Background to new Irish insurance premium tax levy 

With effect from 1st January 2012, Ireland introduced a new levy to fund the losses from Quinn Insurance, which went into administration in 2010. The levy - part of the Insurance (Amendment) Bill 2011 - is called the Insurance Compensation Fund (ICF) Levy and covers all Irish risks of non-life insurance policies, except Health, Marine, Aviation, Cargo and Reinsurance risks.  This new scheme mirrors the levy which covered the failure of PMPA in 1983. The cost of this is estimated at Euro 738m.

The levy has been set at 2% of insurance premiums and is payable by the insurer - although it can be passed on to the insured. This new parafiscal charge is being levied in addition to existing Irish insurance premium taxes: Government Levy (3% of non-Life insurance); and Stamp Duty (Euro 1 per insurance contract).  Funds raised by the new levy are to be paid into the Insurance Compensation Fund. This fund has been used in the past to meet loses from ICI (part of AIB) and PMPA. It will only be available to insurance firms in administration provided they have averaged over 70% of their business in Ireland over a three year period.

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