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Monday, 10th August 2020
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Brokers not paying up for investor compensation Back  
Poor rate of contributions revealed in ICCL report
The first annual report of the Investor Compensation Company Ltd (ICCL), for the year ending July 31 1999, reveals a poor rate of contributions to the compensation scheme from Irish insurance brokers.

The ICCL divides the compulsory contributions from the investment industry into two fund. Fund A covers stockbrokers and credit institutions and fund B covers the insurance sector and accountants involved in investment activity.

Just £304,087 out of the £1 million invoiced by the ICCL on those firms covered by fund B was collected, while £721,032 out of the £812,314 levied on those firms covered by fund A was received.

€If you introduce any new type of arrangement it does take a time for things to settle down and for people to become accustomed to having to contribute. We€ve actively pursued, not only the firms directly, but anyone who can have any influence over them,€ according to Bernard Sheridan, Chief Operations Officer of the ICCL.

He said that if after repeated attempts no successful outcome can be achieved, they inform the Central Bank, who can issue a directive to the offending firm for a contribution or even a suspension notice.

Some IFSC firms who do not have any Irish clients are covered by the compensation scheme and they have expressed annoyance at their compulsory contributions to the funds.

However, Sheridan was firm: €The ability to claim compensation, doesn€t depend on the residency of the claimant as such. Its irrelevant from our point of view where the claimants reside.€

The ICCL is currently investigating the possibility of taking out €catastrophe€ insurance, to provide protection against any major claims on the scheme. €The costs associated with such insurance are punitive but we are still talking with brokers,€ the ICCL Chief Operations Officer said.

Commenting in the annual report, ICCL Chairman, Joe Maher said: €I am disappointed with the number of insurance intermediaries whose contributions are still unpaid.€

€I expect the position will be put right quickly with the co-operation of the regulatory bodies and appropriate insurance companies giving a reliable and up-to-date database of authorised intermediaries.€

The annual report states that the directors of the company were paid fees of £65,000, with the Chairman receiving £15,000, the Deputy Chairman £9,500 and each of the other directors £5,000 each.

The board comprises Chairman Joe Maher; Deputy Chairman Catriona Murphy; Mr Jim Bardon of the IBF; Paul Carty of the IBA; Ann Fitzgerald of the IAIM; solicitor Gearoid Geraghty; Gerardine Jones of the Irish Stock Exchange; solicitor Ann O€Neill; Rady Redmond of the Office of the Director of Consumer Affairs; and Jerry Shanahan of the Manufacturing, Science and Financial Union.

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