Central Bank to slash crash-era levy on insurance policies to 0%
The Irish Central Bank will reduce the insurance compensation levy to 0% starting in January, following the full repayment of a crash-era government loan. This move is expected to provide modest savings for millions of home and motor insurance policyholders.
Why it matters
The removal of this levy provides direct financial relief to consumers during a period of high cost-of-living pressures, signaling the end of a specific post-financial crisis recovery measure.
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 €6.50 on their annual premiums.
Introduced in 2011 in the wake of the collapse of Quinn Insurance, the Insurance Compensation Fund levy was created after the Government paid €1 billion into the vehicle that is used to pay compensation to consumers for claims on failed insurance firms.
It was designed to ensure that policyholders could be compensated in the event of the liquidation of a regulated firm.
The levy was initially set at 2 per cent but was reduced to 1 per cent last year.
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.
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