The Insurance Compensation Fund levy will be reduced from 1% to zero from January 1st, 2027, the Central Bank of Ireland has announced.
The change will affect many home and motor insurance policyholders, including motor customers whose insurer is regulated by the Central Bank.
The levy supports compensation payments for eligible claims when an insurance company fails. Its removal follows repayment of the fund’s outstanding loan to the Exchequer.
The Central Bank expects insurers that explicitly charge the levy separately to reflect its removal in policies from January.
This also applies to existing policies paid by instalments into 2027 where the levy is separately identified.
The benefit will depend on the policy and premium. Using an average motor premium of approximately €655 as an example, the Central Bank said removing a 1% levy would represent around €6.50.
The change concerns the levy component; overall premiums will also depend on insurers’ pricing and other factors.
The fund will remain subject to annual review.
