No. 18/1964:

INSURANCE ACT, 1964

ARRANGEMENT OF SECTIONS

1 Definitions.

2 Insurance Compensation Fund.

3 Payments out of Fund in respect of certain liabilities of insolvent insurers.

4 Grant to Fund by Minister for Finance.

5 Advances to Fund by Minister for Finance.

6 Contributions to Fund by insurers.

7 Restriction on the grant of assurance licences.

8 Amendment of section 22 of Act of 1936.

9 Amendment of section 23 of Act of 1936.

10 Provision in respect of existing deposits by insurers in High Court.

11 Amendment of section 27 of Act of 1936.

12 Purchase and sale of shares of Irish Life Assurance Company, Limited, by Minister for Finance.

13 Construction of articles of association of Irish Life Assurance Company, Limited.

14 Regulations.

15 Expenses.

16 Short title, construction and collective citation.

AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF A FUND TO BE KNOWN AS THE INSURANCE COMPENSATION FUND TO MEET CERTAIN LIABILITIES OF INSOLVENT INSURERS, TO PROVIDE FOR THE MAKING OF A GRANT AND LOANS TO THE FUND BY THE MINISTER FOR FINANCE AND CONTRIBUTIONS TO THE FUND BY INSURERS, AND FOR THOSE AND OTHER PURPOSES TO AMEND AND EXTEND THE INSURANCE ACTS, 1909 TO 1961.

[7th July, 1964.]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:—

1.—In this Act, unless the context otherwise requires,—

"the Accountant" means the Accountant attached to the High Court by virtue of the Courts (Supplemental Provisions) Act, 1961 ;

"the Act of 1936" means the Insurance Act, 1936 ;

"the Fund" means the Insurance Compensation Fund established by section 2 of this Act;

"insurer" means an assurance company or syndicate holding an assurance licence to carry on assurance business other than life assurance business or industrial assurance business;

"the Minister" means the Minister for Industry and Commerce;

"policy" means any document or other writing by which a contract of assurance (other than a contract of re-insurance) in relation to assurance business (other than life assurance business or industrial assurance business) is made or agreed to be made or which is evidence of any such contract.

2.—(1) There shall stand established on the day that falls one month after the date of the passing of this Act a fund to be known as the Insurance Compensation Fund.

(2) The Fund shall, subject to the provisions of this Act and any regulations thereunder, be maintained and administered under the control of the President of the High Court acting through the Accountant.

(3) ( a ) The Accountant may borrow for the Fund and, for the purpose of giving security with respect to such borrowing, may charge investments of the Fund.

( b ) The total amount which shall at any time stand borrowed under this subsection shall not exceed one million pounds.

(4) The Accountant may invest moneys of the Fund in securities in which trustees are authorised by law to invest trust funds.

(5) The Accountant may insure against a risk relating to the Fund.

(6) The following shall be paid into the Fund:

( a ) the sum paid under section 4 of this Act and any sums paid under sections 5 or 6 of this Act,

( b ) interest, dividends and other income and accretions of capital arising from investments of the Fund,

( c ) the proceeds of the realisation of investments of the Fund,

( d ) moneys borrowed for the Fund,

( e ) sums received by the Accountant under any insurance effected by the Accountant in relation to the Fund,

( f ) dividends paid to the Accountant by virtue of subsection (2) of section 3 of this Act in the course of the winding up of an insurer by the High Court,

( g ) other moneys belonging to or accruing to the Fund or received by the Accountant in respect thereof.

(7) The following shall be paid out of the Fund:

( a ) expenses incurred in establishing, maintaining or administering the Fund,

( b ) repayments of moneys borrowed for the Fund and payments of interest on such moneys,

( c ) sums payable out of the Fund pursuant to section 3 of this Act,

( d ) other sums properly payable out of the Fund.

(8) ( a ) The Accountant shall cause to be kept proper and usual accounts of moneys paid into or out of the Fund and shall, within ninety days after the end of each accounting period or such longer time as the Minister shall in any particular case allow, cause to be furnished to the Minister an abstract of the accounts of the Fund for that accounting period and a report of the administration of the Fund during that accounting period.

( b ) The Minister shall cause each abstract and report furnished to him under this subsection to be published.

3.—(1) Subject to the provisions of this section, there may be paid out of the Fund to the liquidator of an insolvent insurer proceedings for the winding up of which by the High Court were commenced or are commenced on or after the 1st day of January, 1963, such amounts as may be necessary to pay any sum (other than a sum payable in respect of the refund of a premium) which is due to a person under a policy issued by the insurer in the State and is in respect of a contingency the insurance of which is required by the Act of 1936 to be effected by an insurer, together with the costs or expenses (if any) necessarily and reasonably incurred by the person in endeavouring to secure payment of the sum, and, upon receipt of the amounts by the liquidator, he shall pay to every such person the sum due to him as aforesaid together with the costs and expenses aforesaid (if any) incurred by him.

(2) Where an amount is paid out of the Fund to the liquidator of an insurer under subsection (1) of this section in respect of a sum due under a policy issued by the insurer and the costs and expenses aforesaid (if any) incurred in relation to the sum, the amount paid shall be admitted in the proceedings for the winding up of the insurer by the High Court as a proved debt of the insurer having the same priority as the sum due under the policy and the Accountant shall, as respects the amount paid out of the Fund, be a creditor of the insurer.

(3) Where a sum is due to a person under a policy by reason of a judgment obtained against the person or in respect of compensation payable by way of a weekly payment by the person under the Workmen's Compensation Acts, 1934 to 1955, the amount payable out of the Fund under subsection (1) of this section in respect of such sum shall, subject to the provisions of this section, be such amount as the Judge of the High Court having seisin of the proceedings for the winding up of the insurer by which the policy was issued may consider reasonable.

(4) Where, in respect of a sum due under a policy, a payment equal to the whole of the sum is made by the Motor Insurers' Bureau of Ireland, a payment shall not be made out of the Fund under this section in respect of the sum, and where, in respect of such a sum, a payment equal to part of the sum is made by the said Bureau, a payment out of the Fund in respect of the sum shall not exceed the amount of the sum less the amount of the payment by the said Bureau.

(5) Where sums in excess of one million pounds are due under policies issued by one insurer, not more than one million pounds shall be paid out of the Fund in respect of such sums and the payments shall be so made that in respect of each sum due under the policies the same proportion thereof is paid out of the Fund.

4.—The Minister for Finance shall make to the Fund out of moneys provided by the Oireachtas a grant of thirty thousand pounds and the said sum shall be used for the purpose of making payments under section 3 of this Act to the liquidator of the Equitable Insurance Company, Limited.

5.—(1) The Minister for Finance may, on the recommendation of the Minister, advance from time to time to the Fund such sums as he thinks proper to enable payments out of the Fund under section 3 f this Act to be made expeditiously.

(2) Advances under subsection (1) of this section shall be made on such terms as to repayment, interest and other matters as may be determined by the Minister for Finance after consultation with the Minister.

(3) All sums paid out of the Fund in repayment of an advance under this section or in pursuance of any term or condition subject to which an advance was made under this section shall be paid into or disposed of for the benefit of the Exchequer.

(4) All moneys from time to time required by the Minister for Finance to meet sums which may become payable by him under this section shall be advanced out of the Central Fund or the growing produce thereof.

(5) The Minister for Finance may, for the purpose of providing for the advance of sums out of the Central Fund under this section, borrow on the security of the Central Fund or the growing produce thereof any sums required for that purpose, and for the purpose of such borrowing, he may create and issue securities bearing such rate of interest and subject to such conditions as to repayment, redemption or otherwise as he thinks fit, and shall pay all moneys so borrowed into the Exchequer.

(6) The principal of and interest on all securities issued under this section and the expenses incurred in connection with the issue of such securities shall be charged on and payable out of the Central Fund or the growing, produce thereof.

6.—(1) Subject to the provisions of this section, an insurer (other than an insolvent insurer which is being wound up by the High Court) shall, on or before the 1st day of October in any year in which a percentage is determined under subsection (2) of this section, pay to the Minister, and the Minister shall transmit to the Fund, the appropriate contribution.

(2) ( a ) In the year 1964 and in every subsequent year in which, in the opinion of the Minister, the state of the Fund is such that financial support should be provided for it, he shall determine the percentage of the annual aggregate income of insurers derived from premiums payable or paid in respect of policies issued in the State that, in his opinion, should be paid to the Fund.

( b ) The contribution (in this section referred to as the appropriate contribution) payable by an insurer under subsection (1) of this section in any year in which a percentage is determined under paragraph (a) of this subsection shall be a sum equal to that percentage of the income of the insurer derived from premiums payable or paid in the financial year of the insurer that ended next before the 1st day of July in that year in respect of policies issued in the State.

(3) An appropriate contribution payable by a syndicate shall be paid to the Minister by the Committee of Lloyd's.

(4) Where an appropriate contribution is not paid in accordance with the provisions of this section, it may be recovered by the Minister—

( a ) in case the contribution is payable by a syndicate, from the Committee of Lloyd's, and

( b ) in any other case, from the insurer by which it is payable,

as a simple contract debt in any court of competent jurisdiction and shall, when recovered by the Minister, be transmitted to the Fund, and the Minister may, if he so thinks fit, on giving notice to the insurer by which the contribution is payable of not less than twenty-one days, revoke the assurance licence of the insurer.

(5) In this section "premium" does not include any money or money's worth payable or paid in respect of life assurance business or industrial assurance business or in respect of a contingency the insurance of which is not required by the Act of 1936 to be effected by an insurer.

7.—(1) Subject to subsection (2) of this section and notwithstanding anything contained in the Act of 1936, the Minister shall not grant any assurance licences under Part II of that Act.

(2) Subsection (1) of this section does not apply in relation to the grant of an assurance licence to a company that is formed and registered under the Companies Act, 1963 , and complies with the conditions specified in subsection (6) or paragraph (b) of subsection (11) of section 12 of the Act of 1936.

8.—(1) Section 22 of the Act of 1936 is hereby amended by the substitution for paragraphs (a), (b) and (c) of subsection (1) of the following paragraphs:

" (a) the sum of one hundred thousand pounds in respect of one or both of the following classes of assurance business, that is to say, life assurance business and industrial assurance business, and

( b ) the sum of one hundred thousand pounds in respect of any one or more than one class of assurance business other than life assurance business, industrial assurance business and glass insurance business."

(2) This section shall come into operation six months after the date of the passing of this Act.

9.—(1) Section 23 of the Act of 1936 is hereby amended by the substitution for subsections (1) and (2) of the following subsection:

" (1) Whenever and so long as there is or are a syndicate or two or more syndicates carrying on in the State any assurance business other than life assurance business, industrial assurance business, bond investment business and glass insurance business, the Committee of Lloyd's shall deposit and keep deposited with the Accountant attached to the High Court by virtue of the Courts (Supplemental Provisions) Act, 1961 , the sum of one hundred thousand pounds."

(2) This section shall come into operation six months after the date of the passing of this Act

10.—(1) Whenever a deposit is, immediately before the commencement of sections 8 and 9 of this Act, maintained in pursuance of the Act of 1936 with the Accountant by an assurance company or the Committee of Lloyd's in respect of a particular class of assurance business and the company or Committee is required by the said section 8 or 9, as the case may be, to deposit and keep deposited with the Accountant a sum of money in respect of the same particular class of assurance business, the said deposit so maintained immediately before the commencement of the said sections 8 and 9 and the investments then representing the same shall be retained by the Accountant and be deemed to be part of a deposit made in pursuance of the said section 8 or 9, as the case may be, by the company or Committee, as the case may be, in respect of the said particular class of assurance business.

(2) Immediately upon the commencement of the said sections 8 and 9, the Accountant shall, in respect of every deposit retained by him in pursuance of subsection (1) of this section, calculate and ascertain the market value at such commencement of the investments then representing the deposit, and shall forthwith give to the company or Committee, as the case may be, by which the deposit was maintained notice in writing stating the amount of the market value ascertained as aforesaid and the amount by which the market value falls short of the full proper amount of the deposit, and, if the company or Committee, as the case may be, not more than one month after receiving the said notice, deposits with the Accountant a sum equal to the difference between the market value and the full proper amount of the deposit, the sum so deposited shall be added to and treated as part of the deposit represented by the said investments and the deposit shall be deemed to have been of the full proper amount as and from the commencement of the said sections 8 and 9.

11.—(1) Section 27 of the Act of 1936 is hereby amended by—

( a ) the substitution of "one hundred thousand pounds" for "twenty thousand pounds" and the deletion of "mechanically propelled vehicle insurance business," in subsection (1),

( b ) the deletion of subsection (2), and

( c ) the substitution for subsection (4) of the following subsection, namely:

" (4) in subsection (3) of this section 'relevant assurance business' means any assurance business other than life assurance business, industrial assurance business, bond investment business and glass insurance business."

(2) This section shall come into operation six months after the date of the passing of this Act.

12.—(1) The Minister for Finance may acquire by subscription or purchase and sell any shares of the Irish Life Assurance Company, Limited.

(2) All sums paid to the Minister for Finance in consideration of the sale by him of any shares of the Irish Life Assurance Company, Limited, or in respect of dividends or other moneys payable in relation to such shares shall be paid into or disposed of for the benefit of the Exchequer.

(3) All sums from time to time required by the Minister for Finance for the acquisition by him of shares in the Irish Life Assurance Company, Limited, shall be advanced out of the Central Fund or the growing produce thereof.

(4) The Minister for Finance may, for the purpose of providing for the advance of sums out of the Central Fund under this section, borrow on the security of the Central Fund or the growing produce thereof any sums required for that purpose, and for the purpose of such borrowing, he may create and issue securities bearing such rate of interest and subject to such conditions as to repayment, redemption or otherwise as he thinks fit, and shall pay all moneys so borrowed into the Exchequer.

(5) The principal of and interest on all securities issued under this section and the expenses incurred in connection with the issue of such securities shall be charged on and payable out of the Central Fund or the growing produce thereof.

13.—The Minister for Finance shall, for the purposes of subparagraph (x) of paragraph 8 of the agreement set out in the Schedule to the Insurance (Amendment) Act, 1938 , be deemed—

( a ) to be and always to have been the beneficial owner of any shares held by him in the Irish Life Assurance Company, Limited, and

( b ) to be and always to have been a citizen of Ireland and a qualified holding body corporate within the meaning of paragraph (f) of subsection (1) of section 9 of the Control of Manufactures Act, 1934 ,

and the articles of association of the Irish Life Assurance Company, Limited, shall be construed and have effect accordingly.

14.—(1) The Minister may make such regulations as he thinks necessary or appropriate for the purpose of giving full effect to the provisions of this Act.

(2) Every regulation made 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 twenty-one days on which that 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.

15.—The expenses incurred by the Minister in the administration of this Act shall to such extent as may be sanctioned by the Minister for Finance be paid out of moneys provided by the Oireachtas.

16.—(1) This Act may be cited as the Insurance Act, 1964 .

(2) The Insurance Acts, 1909 to 1961, and this Act shall be construed together as one Act and may be cited together as the Insurance Acts, 1909 to 1964.