2. Scope of the Regulations

Introduction

As noted above, section 2A of the 1964 Act provides that the Proposed Regulations may “prescribe requirements for insurers (domestic) which carry on motor third party liability insurance in other Member States”.

The term “insurer (domestic)” is defined under section 2 of the Act:

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an insurance undertaking referred to in paragraph (a) the authorisation of which referred to in that paragraph has been revoked by the Bank;”

Accordingly, it is intended that the Proposed Regulations will apply to “insurers (domestic)”, as such term is defined under section 2 of the Act, which carry on motor third party liability insurance in other EU/EEA Member States.

The Proposed Regulations will not apply to “insurers (domestic)”, as such term is defined under section 2 of the Act, which only carry on motor third party liability insurance in Ireland.

Captive insurance undertakings

The Act introduces a new definition “insurer (domestic)”, which includes captive insurance undertakings. The Act therefore provides for compensation for motor third party liability claimants from the moment that the insurer is subject to a winding up decision, irrespective of whether the insolvent insurer is a captive or not. The Department of Finance is therefore considering whether captive insurance undertakings writing Class 10 Motor Third-Party Liability (MTPL) insurance should be required to pay a financial contribution for the purposes of paying eligible compensation under the Act, where the rights of a claimant to claim such compensation could be realised due to the winding up of a captive insurance undertaking.