The Central Bank has said it will cut the financial crash-era levy on general insurance policies to zero from January, a move that could save car insurance policyholders around \u20ac6.50 on their annual premiums. <\/p>\n
Introduced in 2011 in the wake of the collapse of Quinn Insurance, the Insurance Compensation Fund levy was created after the Government paid \u20ac1 billion into the vehicle that is used to pay compensation to consumers for claims on failed insurance firms. <\/p>\n
It was designed to ensure that policyholders could be compensated in the event of the liquidation of a regulated firm.<\/p>\n
The levy was initially set at 2 per cent but was reduced to 1 per cent last year.<\/p>\n
From January, the levy will be cut to 0 per cent, the Central Bank said on Tuesday. The changes will affect holders of non-life insurance policies, such as home and motor insurance.<\/p>\n
\u201cThe changes announced today reflect the financial position of the fund and follows the full repayment of the outstanding loan balance to the exchequer,\u201d Central Bank deputy governor, Mary-Elizabeth McMunn said. \u201cThe reduction of the levy will positively impact a large cohort of policyholders in Ireland. <\/p>\n
\u201cThe Central Bank will continue to conduct annual reviews of the fund and, should circumstances change, the levy may change in the future.\u201d <\/p>\n
The reduction is estimated to eliminate around \u20ac60 million that is currently collected under the levy across the whole sector.<\/p>\n
Policyholder savings will vary depending on policies and premiums. However, given that the average motor insurance premium was \u20ac655 in the first half of 2025 according to the most recent data, a 1 per cent reduction would result in savings of \u20ac6.50.<\/p>\n
T\u00e1naiste and Minister for Finance Simon Harris welcomed the reduction. <\/p>\n
\u201cAt a time when households are experiencing cost of living pressures, the reduction will have a direct and positive impact on the cost of insurance for approximately 2.35 million private motor insurance policies and 1.3 million home insurance policies on renewal next year,\u201d he said.<\/p>\n
Minister of State for Financial Services, Credit Unions and Insurance Robert Troy said the Government had done \u201csignificant work\u201d to reduce motor insurance premiums since 2016.<\/p>\n
\u201cIt is further evidence of progress being made in the insurance market, and it is now on insurers to act responsibly and pass on this reduction to their customers,\u201d he said. <\/p>\n
Insurance Ireland, the representative body for the industry, also welcomed the move. <\/p>\n
\u201cAt a time when increasing costs are an important consideration for households and businesses, this is tangible proof of the ongoing stability of the Irish non-life insurance market,\u201d a spokeswoman said. <\/p>\n
The reduction comes against a backdrop of a sharp rise in motor insurance premiums last year despite an ongoing decline in the costs incurred by insurers from injury claims.<\/p>\n
Central Bank data published earlier this year revealed that motor premiums increased by an average of 4 per cent in the first six months of 2025, more than double the rate of consumer price inflation over the same period. <\/p>\n
At the time, Insurance Ireland blamed the increase on rising volumes and the costs of damage-related claims, rather than injury claims. The total cost of damage claims jumped by 8 per cent in the first six months of 2025 compared to the same period in 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"The Central Bank has said it will cut the financial crash-era levy on general insurance policies to zero…\n","protected":false},"author":2,"featured_media":639802,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[72,4505,61,5167,5166,60,271717,50158,70],"class_list":["post-639801","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-central-bank","tag-ie","tag-insurance","tag-insurance-ireland","tag-ireland","tag-quinn-group","tag-robert-troy","tag-simon-harris"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/639801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=639801"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/639801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/639802"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=639801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=639801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=639801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}