The decision will come into effect on the 1st of January 2027.
Welcoming the Central Bank’s announcement, Tánaiste and Minister for Finance Simon Harris commented:
“The Insurance Compensation Fund (ICF) has been an important protection mechanism for Irish policyholders, ensuring that outstanding non-life insurance claims can still be paid when an insurer goes into liquidation. The State advanced more than €1 billion to the Insurance Compensation Fund (ICF) after Quinn Insurance went into liquidation in 2011, and a levy of 2% was introduced.
“I welcome the announcement of a reduction in the levy to 0% from the first of January 2027. This marks the second change in the levy in two years, following its reduction from 2% to 1% in January 2026.
“At 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.”
Minister of State for Financial Services, Credit Unions and Insurance Robert Troy commented:
“Trust, transparency and affordability are vital for the insurance sector at a time when households are facing continued cost of living pressures.
“Significant work has been done over many years to reduce motor insurance premiums from their July 2016 peak and today’s announcement is good news for policyholders and the sector.
“It 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”
