Today, our Minister for Finance published a bill which proposes a new tax of up to 2% on all non-life insurance policies. This new insurance levy will help fund the Insurance Compensation Fund (ICF).
The joint administrators of Quinn Insurance Ltd. estimate that they will require €600 million from the Insurance Compensation Fund to fund losses from the business of Quinn Insurance. It is estimated that they will need €320 million before the end of this year. The ICF currently stands at €40 million and the Minister for Finance estimates that this new tax on insurance policies will raise €65 million this year.
This is bad news for policyholders. We can expect this new tax soon.
Already Irish policy holders are paying a 3% tax on all non-life or general insurance policies. The money raised from this 3% tax on insurance premiums goes into the Exchequer fund along with all other tax receips used to fund the state. The proposed additional 2% tax on insurance premiums will go directly to the Insurance Compensation Fund.
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