Minister’s Brief

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An amendment to the Solvency II Delegated Act came into effect on 1 April 2016 and relates to investment by Insurance undertakings in infrastructure projects and European Long Term Investment Funds (ELTIFs) o Public consultation on Venture Capital EuSEF/EuVeCa: EU Social Entrepreneurship Funds Regulation (EuSEF) sets out a new “European Social Entrepreneurship Fund” label, so investors can identify funds that focus on investing in European social businesses and the EU Venture Capital Regulation (EuVeCa) sets out a new “European Venture Capital Fund” label, so investors can identify funds that focus on investing in European ‘start-up’ businesses. The Commission have indicated an early review of these instruments as CMU action point. Commission consultations on-going o Prospectus Directive Proposal The Commission published a proposal for a Regulation on November 30 2015. Council Working Party meetings commenced in January 2016. The Dutch Presidency aim to secure a Council agreement by the end of their term. o Public consultation on Covered Bonds Although various EU Directives refer to covered bonds, there is no single EU framework that governs covered bond laws across the EU. Most Member States have national regulations setting out the general requirements for issuers, public supervision and the provision for ringfencing of assets in the event of bankruptcy. The European Commission believe there is good reason to explore the case for an EU covered bonds framework. The Commission view is that a comprehensive EU covered bond framework, establishing a ‘gold standard’ based on the best EU practices, could potentially address the main regulatory differences that complicate investment in and trading of EU covered bonds, facilitate more efficient functioning of markets for these instruments and foster further integration in capital markets, and improve investor protection, market transparency and liquidity. Ireland has the thirteenth largest covered bond market in the EU now, at €43bn. o Crowdfunding The Department is engaging in ongoing EU level meetings on the future development of crowdfunding nationally and in the EU. o Barriers to the free movement of capital in the EU The Department participates in this strand of CMU and is seeking to improve the rules concerning the dual listing of stocks in order to create a more vibrant Irish equities market. Page 94 of 184
o Cumulative impact of financial legislation Call for Evidence on the EU Regulatory Framework for Financial Services - Responses were due to be returned by 31 January 2016. The Department responded by way of a letter from the Minister to Commissioner Hill addressing high-level matters. Insurance Insurance Sector Risk There have been concerns about the underwriting profitability of Ireland’s non-life insurance sector which is highly competitive. The Governor of the Central Bank responded to a request from the Minister for Finance for a report on the domestic insurance sector in August of last year. In the response, the Governor explained the current difficulties and provides assurance that corrective actions are underway in the non-life insurance sector. The response also raises a number of policy issues which provides a basis for a work programme for a review of the insurance sector. Setanta Liquidation Progress in the liquidation of Setanta is awaiting the outcome of the High Court case of the Law Society of Ireland versus the Motor Insurers' Bureau of Ireland (MIBI). On 4 th September 2015, the High Court held that the MIBI is liable in respect of claims against the policy holders of Setanta. The MIBI subsequently appealed the case and the Court of Appeal upheld the High Court decision. The current position is that the MIBI has announced that it has decided to apply to the Supreme Court for leave to appeal the Court of Appeal judgement. The insurance Industry points out that the MIBI ruling is causing stress in the Irish insurance industry and have requested changes to the Insurance Compensation Fund (ICF) legislation and the MIBI Agreement. At the insurance industry’s request, the Minister for Finance and the Minister for Transport, Tourism and Sport met most of the CEOs of the motor insurance companies operating in Ireland in December 2015 to discuss the matter. Review of Insurance Compensation The Department of Finance and the Department of Transport, Tourism and Sport have commenced a review of the framework for motor insurance compensation. The Joint Working Group will report to both Ministers with recommendations by end-April 2016. The outcome of this Review will also feed into a wider review of policy in the insurance sector which the Department is currently undertaking and which is outlined below. Review of Policy in the Insurance Sector The Department has commenced a Review of Policy in the Insurance Sector. This is being undertaken in consultation with the Central Bank and other Departments and Agencies. The objective of the Review is to recommend measures to improve the functioning and regulation Page 95 of 184
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Minister’s Brief 2016 s Page 1 of
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3.2.1.1 Policies on Mortgage Arrear
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1. Introduction For the purposes of
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2.1 Economic and Fiscal Directorate
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2.2 Finance and Banking Directorate
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3. Detailed Briefing Page 11 of 184
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3.1.2 Economic Division Description
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changes in the relevant tax base) a
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3.1.2.3 Economic coordination inclu
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Assessment of compliance with SGP o
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was a deviation from the fiscal rul
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tax, followed by personal income ta
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Tax Strategy Group - What Does It D
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Detail: Income Tax Policy Income Ta
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Credit in 2014 - that credit was of
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INCOME TAX INCENTIVES Agri-Taxation
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Marine taxation In Budget 2016, a r
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Detail: Indirect Tax Policy Tax Hea
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Page 76 and 77: available is €1.8 million. Initia
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3.2.4.1 Liaison with the Attorney G
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3.2.4.2 Management of the Accountan
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Future Developments The vote accoun
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3.2.5 International Financial Insti
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Key Points: International Monetary
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with the delegation led by Second S
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assistance to the developing world.
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In addition to capital contribution
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would be the Minister for Finance o
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3.3 Corporate Page 165 of 184
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supported by OPW and a number of ex
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3.3.2. Corporate Affairs Descriptio
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member, the Department has a Busine
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ability of both electronic files an
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3.3.3. Human Resources Division Des
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Detail: 1. Organisational Structure
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effectively to improve and deliver
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The Department is currently reviewi
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Erosion of income tax base did not
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Minister’s Brief

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