Insurance Act, 1989

Insurance Compensation Fund.

31.—(1) Subsection (1A) (inserted by the Act of 1983) of section 3 of the Insurance Act, 1964 , shall not apply to the liquidator of an insurer (within the meaning of the Act of 1983) the winding up of which is commenced by the Court after the commencement of this section.

(2) Section 3 of the Insurance Act, 1964 , is hereby amended by the insertion of the following subsections after subsection (1A):

“(1B) (a) Subject to the provisions of this section, there may, with the approval of the High Court, be paid out of the Fund to the liquidator of an insolvent insurer (including an insurer whose authorisation has been revoked by the Minister) the winding up of which has been commenced by the High Court after the commencement of section 31 of the Insurance Act, 1989, such amount or amounts (subject to the limit provided for in paragraph (b)) as the Court may from time to time authorise in respect of any sum (other than a sum payable in respect of the refund of a premium) due to a person under a policy issued by the insurer in the State in respect of a risk situated in the State, together with the costs and expenses (if any) necessarily and reasonably incurred by the person in endeavouring to secure payment of the sum.

(b) The total amount which may be paid out of the Fund under paragraph (a) in respect of any sum due to a person under a policy shall not exceed (whether as one payment or as the total of a series of payments) sixty-five per cent. (or six hundred and fifty thousand pounds, whichever is the less) of such sum.

(1C) Where any sum referred to in subsection (1B) relates to the liability of the insured to a third party, the limitation prescribed by that subsection on payment out of the Fund applies to the sum required to meet the liability of the insured to that third party.

(1D) Subsection (1B) does not apply to any sum due to a body corporate or unincorporated body of persons unless the sum is due in respect of the liability of such body to an individual or in respect of the liability of an individual to such body.

(1E) Where any amount is paid out of the Fund to a liquidator under subsection (1B) the liquidator shall pay such amount to the person in respect of whom it is due.”.

(3) Subsection (2B) (inserted by the Act of 1983) of the said section 3 shall not apply to the administrator of an insurer (within the meaning aforesaid) the administration of which is commenced after the commencement of this section.

(4) Section 3 of the Insurance Act, 1964 , is hereby amended—

(a) by the deletion from subsection (2C) (b) (inserted by section 9 of the Act of 1983) of “the Minister may at any time waive all or any part of the said debt on behalf of the Fund” and the substitution of “the Minister may with the consent of the Minister for Finance at any time waive all or any part of the said debt on behalf of the Fund”; and

(b) by the substitution of the following subsection for subsection (2A) (inserted by section 9 of the Act of 1983):

“(2A) Where an amount is paid out of the Fund to the liquidator of an insurer under subsection (1A) or (1B) of this section in respect of a sum due under a policy issued by the insurer and the costs and expenses (if any) incurred in relation to the sum, or, where subsection (1A) applies, in respect of a refund of a premium, the Accountant shall, as respects the amount paid out of the Fund, be a creditor of the insurer, and that amount shall be admitted in the proceedings for the winding up as a proved debt of the insurer having priority to any sum remaining due under the policy or in respect of the refund of the premium, as the case may be.”.

(5) Section 6 (2) (d) of the Insurance Act, 1964 (inserted by section 10 of the Act of 1983) is hereby amended by the deletion of the definition of “aggregate income” and the substitution of the following definition:

“‘aggregate income’ in relation to an insurer in respect of any period, means the gross amount of premiums paid or payable to the insurer in respect of policies issued by him in the State in that period in respect of risks situated in the State;”.

(6) In this section “the Act of 1983” means the Insurance (No. 2) Act, 1983 .

(7) A risk shall be deemed to be situated in the State for the purposes of sections 3 and 6 of the Insurance Act, 1964 , as amended by this section, where the policy or other instrument of insurance relates to—

(a) property consisting of buildings or buildings and their contents, insofar as the contents are covered by the same policy or other instrument of insurance, if the property is situated in the State;

(b) vehicles, including land vehicles, railway rolling stock, aircraft, sea, lake, river and canal vessels, if the vehicle is registered in the State;

(c) travel or holiday risks, whatever the class concerned, if the policy or other instrument of insurance is issued in the State;

or, in any other case, if the policyholder is ordinarily resident in the State or if the policyholder is a legal person and the establishment to which the policy or other instrument of insurance relates is situated in the State.