Providing a strong ecosystem for financial services in Ireland is a key aim. By allowing structures and oversight to enable a competitive and robust financial services sector, this will lead to stronger and better value financial services for all.
It is important to support a well-regulated, effectively supervised, competitive and stable banking sector that will protect consumer interests and small to medium-sized enterprises (SMEs).
The main banking objectives are centred around the following:
The government also has an objective to protect the State’s investment in AIB, Bank of Ireland and Permanent TSB, and to maximise the value of the disposal of its shareholding.
The everyday operations of these banks are not managed by the government, directly. They are governed by published Relationship Framework Agreements.
Here is some more information, figures and the published frameworks in relation to the State's shareholding in the banks.
Credit Unions are independent, not-for-profit organisations that exist solely for the benefit of members, and not stockmarkets. Ireland has one of the highest levels of credit union membership in the world.
The government is overseeing a restructuring of the country's credit unions.
The objectives of the restructuring are to:
This restructuring of the credit union sector is in line with:
Here are more details on credit unions and the Irish Economy.
Addressing the rising cost of personal and business insurance in Ireland, and determining solutions for these increases, is an important part of reforming the country's insurance sector.
The Cost of Insurance Working Group was established in 2016, to examine the factors contributing to the increasing cost of insurance and to identify measures to reduce this cost, taking account of the requirement that we maintain a financially stable insurance sector. The policy objective is to deliver fairer premiums for consumers. The Working Group is chaired by Minister of State Michael D’Arcy TD and brings together all the relevant Departments and Offices involved with the process.
Since it was established, the Group has carried out a major review of the sector through the Cost of Insurance Working Group. Two reports have been produced, namely the Report on the Cost of Motor Insurance and the Report on the Cost of Employer and Public Liability Insurance.
The primary purpose of both these reports has been to determine the factors and drivers behind the rising cost of personal and business insurance and to make a series of recommendations to try to address this problem. In addition, a number of progress updates have been published detailing progress on the implementation of the recommendations of both reports – further information on the work of the Group including updates are available on The Cost of Insurance Working Group page.
Part of the reform of the insurance sector involves maintaining a stable, transparent and open market place for motor insurance. This involves allowing customers to compare policies and prices effectively and, where possible, make the changes to their circumstances that will reduce their premium.
Motor Insurance Compensation
A joint review of the motor insurance compensation framework was completed by the Department of Finance and the Department of Transport in 2016. The Report of the Review of the Framework for Motor Insurance Compensation in Ireland was triggered by the failure of Setanta Insurance in 2014 and the uncertainty that followed over the compensation arrangements for third party claimants.
The government's objective is to examine what could be done to address the uncertainties of the existing compensation regime. It also aims to examine the inequity between the Motor Insurers' Bureau of Ireland award levels for third party claimants and the levels paid by the ICF, for any future motor insurance insolvencies.
The key recommendations on coverage and funding have been implemented via theInsurance Amendment Act 2018, which provides that the level of compensation from the insurance compensation fund, for third party motor claims, be increased from 65% to 100%. It also provides that Setanta third party claimants be compensated in full.
The focus of the last number of governments has been to work on the development of a sustainable, planned and risk-based approach to dealing with flooding problems.
This should in turn lead to the increased availability and reduced cost of flood insurance.
In particular, communication is facilitated between the Office of Public Works (OPW) and the insurance industry, in relation to completed flood defence schemes, and to gain a better understanding about the provision of flood cover in marginal areas.
Liquidation of Insurance Companies
There is a minimum level of protection for policyholders where an insurance company goes into liquidation.
The objective of the Insurance Compensation Fund is to safeguard Irish insurance policies (excluding life insurance policies) that have been sold from Ireland or any other European Economic Area (EEA) Member State.
The Solvency II Directive is the primary legislative framework with regard to the prudential supervision of insurance companies. It applies to all insurance and reinsurance companies with gross premium income exceeding €5 million or gross technical provisions in excess of €25 million. It was transposed into Irish national law by the the European Union Insurance and Reinsurance Regulations 2015 .
Ireland's IFS sector was established in the 1980s and is in a very strong position today.
The government has a strategic and co-ordinated approach to promoting Ireland as a leading location for international financial services.
Continued promotion of jobs in Dublin, and in regions around Ireland, is a key part of the Government’s target is to grow the level of direct employment in the International Financial Services sector.
This is detailed in the IFS2020 Strategy.
The government is committed to reforming the area of pension provision and pension savings in Ireland.
The issues set out in the Pensions Roadmap 2018 - 2023 are as follows:
Money laundering and terrorist financing has a negative affect on a country's financial system and undermines its stability. It is important that Ireland, as a small, open economy is an active participant in preventing its financial system from being used for criminal activity.
The government takes a lead role in the development of policies to combat money laundering and terrorist financing at an international level.
The Financial Action Task Force (FATF) recommendations set out the essential measures to:
The government seeks to ensure that our laws in relation to financial services promote stability, market integrity and investor protection, while facilitating competition and innovation. This includes representing Ireland’s interests at EU negotiations on the various legislative proposals regarding financial markets and the transposition of EU directives in this area into Irish Law. More information is available on the Markets and Securities page.
It is essential to protect and maintain Ireland’s reputation as a leading location for regulated investment funds.