Government welcomes end to Insurance Compensation Fund levy
The Central Bank of Ireland has announced a reduction in the Insurance Compensation Fund levy from 1% to 0%, effective from January 2027. This move aims to ease financial pressures on households amid rising insurance costs.
Source:
Gov.ie / MerrionStreet
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⏱️ 2 min read
The Tánaiste and Minister for Finance, Simon Harris T.D., alongside Minister of State for Financial Services, Credit Unions and Insurance, Robert Troy T.D., have today welcomed the Central Bank of Ireland’s decision to eliminate the Insurance Compensation Fund (ICF) levy entirely. The change, set to take effect on 1 January 2027, follows a previous reduction from 2% to 1% in January 2026, reflecting ongoing efforts to ease financial burdens on households.
Speaking on the announcement, the Tánaiste highlighted the ICF’s role in protecting policyholders when insurers face liquidation. He noted that the State advanced over €1 billion to the Fund after Quinn Insurance’s collapse in 2011, underlining the importance of stability in the insurance market. The reduction to 0% will directly benefit approximately 2.35 million private motor insurance policies and 1.3 million home insurance policies due for renewal next year.
Minister Troy emphasised the need for trust and transparency in the insurance sector, particularly as households continue to grapple with cost of living pressures. He stressed that while progress has been made in reducing premiums since their 2016 peak, insurers must now act responsibly to pass on the savings to customers. The ICF, established under the Insurance Act 1964, ensures payments to policyholders in the event of an insurer’s insolvency, with contributions historically capped at 2% of gross premiums.
Speaking on the announcement, the Tánaiste highlighted the ICF’s role in protecting policyholders when insurers face liquidation. He noted that the State advanced over €1 billion to the Fund after Quinn Insurance’s collapse in 2011, underlining the importance of stability in the insurance market. The reduction to 0% will directly benefit approximately 2.35 million private motor insurance policies and 1.3 million home insurance policies due for renewal next year.
Minister Troy emphasised the need for trust and transparency in the insurance sector, particularly as households continue to grapple with cost of living pressures. He stressed that while progress has been made in reducing premiums since their 2016 peak, insurers must now act responsibly to pass on the savings to customers. The ICF, established under the Insurance Act 1964, ensures payments to policyholders in the event of an insurer’s insolvency, with contributions historically capped at 2% of gross premiums.
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