Motor Insurance Insolvency Compensation Act 2024

PART 1 Preliminary and General

1. Short title, collective citations, construction and commencement

1. (1) This Act may be cited as the Motor Insurance Insolvency Compensation Act 2024.

(2) Sections 24 to 31 and the Insurance Acts 1909 to 2021 may be cited together as the Insurance Acts 1909 to 2024 and shall be construed together as one.

(3) The collective citation the National Treasury Management Agency Acts 1990 to 2024 includes section 32 and those Acts and that section shall be construed together as one.

(4) Section 33 shall be construed together with the Value-Added Tax Acts.

(5) This Act shall come into operation on such day or days as the Minister may by order or orders appoint either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

2. Interpretation

2. (1) In this Act—

“Act of 1964” means the Insurance Act 1964;

“Agency” means the State Claims Agency;

“Bank” means the Central Bank of Ireland;

“Compensation Body” means Comhlacht na hÉireann um Chúiteamh Mótair;

“compensation body (other)” means the body of a Member State (other than the State) authorised as the compensation body for that Member State for the purposes of Articles 10a and 25a of the Directive;

“Directive” means Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009[^3] relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability, as amended by Directive (EU) 2021/2118 of the European Parliament and of the Council of 24 November 2021[^4];

“enactment” has the meaning assigned to it by the Interpretation Act 2005;

“financial year”, in relation to the Compensation Body, means the financial year of the body for the time being authorised under section 5(1) as the compensation body referred to in section 5(1)(a);

“Fund” means the Insurance Compensation Fund established by section 2 of the Act of 1964;

“injured party” means any person entitled to compensation in respect of any loss or injury caused by a vehicle within the meaning of section 56(9) of the Road Traffic Act 1961;

“insurer authorised in another Member State” means an insurance undertaking that—

(a) has been granted an authorisation, under the law of a Member State (other than the State), by the authority in that Member State charged by the law of that Member State with the duty of supervising the activities of insurance undertakings in that Member State, and is consequently authorised to carry on the business of insurance in the State in accordance with one or more of the authorising regulations within the meaning of the Act of 1964, and

(b) writes insurance contracts covering risks falling within class 10 in Part 1 of Schedule 1 to the Regulations of 2015;

“insurer (domestic)”—

(a) subject to paragraph (b), means an insurance undertaking (other than an insurer authorised in another Member State) that—

(i) is authorised, under the Regulations of 2015, to carry on the business of non life insurance within the meaning of those Regulations, and

(ii) writes insurance contracts covering risks falling within class 10 in Part 1 of Schedule 1 to the Regulations of 2015,

and

(b) includes an insurance undertaking referred to in paragraph (a) the authorisation of which referred to in that paragraph has been revoked by the Bank;

“Member State” has the meaning assigned to it by the Act of 1964;

“MIIC Fund” has the meaning assigned to it by the Act of 1964;

“Minister” means the Minster for Finance;

“motor claim” means a claim that is made in respect of insurance business falling within any of the following classes in Part 1 of Schedule 1 to the Regulations of 2015:

(a) class 1(d) (injury to passengers);

(b) class 3 (all damage to or loss of land motor vehicles and land vehicles other than motor vehicles);

(c) class 7 (all damage to or loss of goods in transit or baggage, irrespective of the form of transport);

(d) class 10 (all liability arising out of the use of motor vehicles operating on the land, including carrier’s liability);

“MTPL insurance obligation” means the motor third party liability insurance obligation under Article 3 of the Directive (excluding carrier’s liability);

“Regulations of 2015” means the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015);

“reimbursement claim” shall be construed in accordance with section 10(3)(c);

“relevant insurer” means—

(a) an insurer (domestic), or

(b) an insurer authorised in another Member State;

“relevant purposes” means the purposes referred to in section 5(1)(a);

“resident in another Member State”, in relation to an injured party, means—

(a) if the injured party is an individual, the party is habitually resident in a Member State (other than the State), or

(b) if the injured party is a legal person, the party’s sole or head office is situated in a Member State (other than the State);

“resident in the State”, in relation to an injured party, means, subject to subsection (4)(a)—

(a) if the injured party is an individual, the party is habitually resident in the State, or

(b) if the injured party is a legal person, the party’s sole or head office is situated in the State;

“specified”, in relation to a form, means specified under section 23;

“voluntary winding-up proceedings” means collective proceedings which are solvent as construed in accordance with the definition of “winding-up proceedings” in Regulation 270 of the Regulations of 2015;

“winding-up decision”, in relation to a relevant insurer, means a decision referred to in Regulation 275 of the Regulations of 2015 to open up winding-up proceedings with respect to the relevant insurer;

“winding-up proceedings”, in relation to a relevant insurer, means the relevant insurer is subject to winding-up proceedings within the meaning of Regulation 270 of the Regulations of 2015.

(2) A word or expression that is used in this Act and is also used in the Directive has, unless the context otherwise requires, the same meaning in this Act as it has in the Directive.

(3) A reference in this Act to an injured party (other than in the definition of “resident in the State” in subsection (1)) includes a reference to a person acting on behalf of the injured party.

(4) For the avoidance of doubt—

(a) whether or not an injured party is resident in the State shall be determined by virtue of the party’s residence status at the time (if any) that the party presents a claim under section 9 to the Compensation Body, and

(b) the reference in subsection (3) to a person acting on behalf of the injured party includes the liquidator (within the meaning of Regulation 270 of the Regulations of 2015) of a relevant insurer.

3. Regulations, etc.

3. (1) Every order under section 5(1)(b) or 17(1)(a) or regulation made by the Minister under this Act shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order or regulation is passed by either such House within the next 21 days on which the House has sat after the order or regulation is laid before it, the order or regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(2) Regulations made under this Act may contain such incidental, supplementary and consequential provisions as appear to the Minister to be necessary or expedient for the purposes of the regulations.

4. Expenses

4. Any expenses incurred by the Minister in the administration of the Act shall, to such extent as may be sanctioned by the Minister for Public Expenditure, National Development Plan Delivery and Reform, be paid out of moneys provided by the Oireachtas.

PART 2 Compensation Body

5. Authorisation of body as State’s compensation body for purposes of Act and Articles 10a and 25a of Directive

5. (1) (a) Subject to paragraph (b), the body known as the Motor Insurers’ Bureau of Ireland is hereby authorised as the compensation body for the State for the purposes of this Act and Articles 10a and 25a of the Directive.

(b) (i) Subject to paragraph (c) and subsection (5), the Minister may, where he or she is satisfied that it is in the interests of the effective and efficient performance of the Compensation Body’s functions in relation to the relevant purposes to do so, by order, authorise a body other than the Motor Insurers’ Bureau of Ireland to be the compensation body referred to in paragraph (a) with effect from a date specified in the order.

(ii) The order may provide for such transitional arrangements as the Minister considers necessary or expedient to reflect such authorisation, including matters relating to—

(I) the transfer of records, data and information,

(II) the preparation of final accounts,

(III) the continued performance, by the body ceasing to be the compensation body referred to in paragraph (a), of functions specified in the order in relation to the relevant purposes until a date, or an event, specified in the order, and

(IV) such incidental, supplementary and consequential provisions as will assist the body becoming the compensation body referred to in paragraph (a) in performing its functions in relation to the relevant purposes.

(c) The Minister may exercise his or her power under paragraph (b) in relation to a body authorised under that paragraph to be the compensation body referred to in paragraph (a) in such a way as to authorise a body other than the body first mentioned in this paragraph to be such competent body and paragraph (b) shall, with all necessary modifications, be construed accordingly.

(d) The body for the time being authorised under this subsection to be the compensation body referred to in paragraph (a) shall, for the relevant purposes, be known as Comhlacht na hÉireann um Chúiteamh Mótair.

(2) (a) Subject to paragraph (b), the Compensation Body shall provide compensation to injured parties resident in the State (and regardless of whether the accident concerned occurred in the State or another Member State) at least up to the limits of the MTPL insurance obligation, for damage to property or personal injuries caused by a vehicle insured by a relevant insurer, from the moment when the insurer is subject to a winding-up decision.

(b) Paragraph (a) shall not prejudice the operation of section 3BA of the Act of 1964.

(3) (a) The Compensation Body shall have the power to negotiate and conclude an agreement, for the performance of its functions in relation to the relevant purposes, in accordance with Articles 10a and 25a of the Directive, with one or more than one compensation body (other).

(b) Where the Minister exercises his or her power under subsection (1)(b) to authorise a different body as the compensation body referred to in subsection (1)(a), that different body shall, in its capacity as the Compensation Body, be bound by the provisions of any agreement referred to in paragraph (a) which have any force or effect on or after that different body becomes such compensation body.

(4) (a) Where there is a failure by the Compensation Body to perform one or more than one of its functions in relation to the relevant purposes, the Minister may, after having regard to—

(i) the circumstances giving rise to the failure,

(ii) the consequences if the failure is not remedied,

(iii) the impact, or potential impact, of the failure on one or more than one injured party, and

(iv) any proposal put to the Minister by the Compensation Body to remedy the failure,

by notice in writing given to the Compensation Body, request that the Compensation Body perform the function or functions the subject of that failure within the period specified in the notice for the purpose, being a period reasonable in all the circumstances of the case.

(b) The Compensation Body shall comply with a request given to it under paragraph (a).

(5) (a) Subject to paragraph (b), the Compensation Body may, by notice in a form specified by the Minister for the purposes of this paragraph, make a request to the Minister to exercise his or her power under subsection (1)(b) to authorise a different body to be the compensation body referred to in subsection (1)(a).

(b) Subject to paragraph (c), a request referred to in paragraph (a) shall specify a date, being a date not earlier than the second anniversary of the date on which the Minister receives the request, on which the Compensation Body wishes the Minister to comply with the request and, accordingly, the Minister shall comply with the request on the date so specified.

(c) A request referred to in paragraph (a) shall not be construed to prejudice the generality of the Minister’s power under subsection (1)(b) and, accordingly, that power may be exercised, as the Minister thinks fit, before the date referred to in paragraph (b) specified in the request.

(6) Any person who is or was a director, or other officer or employee, of the body for the time being authorised under subsection (1) as the compensation body referred to in subsection (1)(a) shall not be liable in damages for anything done, purported to be done or omitted to be done in such body’s performance of one or more than one of its functions in relation to the relevant purposes unless the act or omission is shown to have been done, purported to have been done or omitted to have been done, as the case may be, in bad faith.

6. Funding and costs and expenses of Compensation Body

6. (1) Subject to section 5 of the Act of 1964, the Bank shall, as expeditiously as possible and having regard to the time limits specified in paragraph 7 of Article 10a, or paragraph 7 of Article 25a, of the Directive, cause to be paid out of the Fund to the Compensation Body sums providing for—

(a) compensation referred to in paragraph 1 of Article 10a, or paragraph 1 of Article 25a, of the Directive to injured parties resident in the State at least up to the minimum required by the MTPL insurance obligation, and

(b) compensation payments for motor claims in accordance with the Act of 1964.

(2) Subject to section 5 of the Act of 1964, the Bank shall, as expeditiously as possible, and having regard to the time limits specified in section 10(4), cause to be paid out of the Fund to the Compensation Body sums providing for—

(a) compensation referred to in paragraph 1 of Article 10a, or paragraph 1 of Article 25a, of the Directive, in each case at least up to the minimum required by the MTPL insurance obligation, for injured parties resident in another Member State where an insurer (domestic) carrying on motor third party liability insurance in that other Member State is the subject of a winding-up decision, and

(b) the reimbursement referred to in section 10(3).

(3) The Compensation Body shall, in respect of each financial year, cause to be kept proper and usual accounts of—

(a) claims paid and costs and expenses incurred in performing its functions in relation to the relevant purposes, and

(b) the costs and expenses referred to in paragraph (a) that are defrayed from the Fund.

7. Reporting requirements of Compensation Body

7. (1) Where in any financial year (in this subsection referred to as the “relevant year”) the Compensation Body has provided compensation referred to in section 5(2) and received or paid reimbursement (if any) under section 10, it shall, not later than the expiration of the first 7 months of the immediately succeeding financial year, prepare and submit to the Minister a report in writing containing, at a minimum—

(a) a statement of the amounts of such compensation paid during the relevant year,

(b) a statement of the amounts of such reimbursement (if any) received during the relevant year,

(c) a statement of the costs and expenses incurred by the Compensation Body during the relevant year, and

(d) a statement setting out, in general terms, the operations of the Compensation Body during the relevant year, in particular as regards any matter that the Compensation Body is satisfied should be brought to the attention of the Minister.

(2) The Minister shall, as soon as is practicable after receiving the report referred to in subsection (1), cause a copy of it to be laid before each House of the Oireachtas.

(3) The Minister may, by notice in writing given to the Compensation Body, request the Compensation Body to give to the Minister such information relating to the performance of its functions in relation to the relevant purposes as is specified in the notice and the Compensation Body shall, not later than 28 days after it receives the notice, comply with that request.

8. Publication of winding-up of insurer (domestic)

8. (1) Where an insurer (domestic) has become the subject of a winding-up decision, the Bank and the insurer (domestic) shall each, as soon as is practicable after that decision has been made but, in any case, not later than 5 working days after that decision has been made, give notice in writing to the Compensation Body of—

(a) that decision and the date on which it was made, and

(b) the name and address of the head office of the insurer (domestic).

(2) The Compensation Body shall, as soon as is practicable after it receives a notice under subsection (1) from the Bank—

(a) publish the notice on its website and in such other ways (if any) as it thinks fit, and

(b) give each compensation body (other) a copy of the notice.

9. Presentation and processing of motor claims by Compensation Body

9. (1) An injured party who is resident in the State and whose loss or injury is caused by a relevant accident may present a motor claim in the specified form to the Compensation Body.

(2) The Compensation Body shall investigate the relevant claim and if it determines that the relevant insurer who wrote the relevant contract is an insurer authorised in another Member State, it shall, as soon as is practicable after it receives the relevant claim, by notice in writing inform the relevant insurer and the compensation body (other) concerned that it has received the relevant claim and provide each of them with a copy of the relevant claim.

(3) (a) Paragraph (b) applies where the relevant insurer who wrote the relevant contract is an insurer (domestic) which has already investigated the precedent claim and—

(i) both—