Tuesday 27 September 2016

Brokers hit out at Central Bank levies hike

Gordon Deegan

Published 25/09/2015 | 02:30

The Central Bank proposes to hike levies from €515 to €750. Levies in 2011 were €145.
The Central Bank proposes to hike levies from €515 to €750. Levies in 2011 were €145.

Chief executives of the two bodies representing 90pc of the country's insurance brokers say that plans by the Central Bank to hike up levies on intermediaries by 45pc are "unacceptable".

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Irish Brokers Association ceo Ciaran Phelan and Professional Irish Brokers Association ceo Diarmuid Kelly told Finance Minister Michael Noonan that members are already struggling after significant rises in Central Bank levies over recent years.

The Central Bank proposes to hike levies from €515 to €750. Levies in 2011 were €145.

The two state that the cumulative increase since 2011 will be 515pc if the latest levy increase is sanctioned. They say they were advised by the Central Bank that the most significant driver of the 2015 rise is the funding of the bank's pension scheme which amounts to a cost of €29m.

In their joint letter the two have asked Minister Noonan to explore alternative options in relation to funding the pension cost "rather than passing this cost to the industry who are already struggling to survive".

In August, Mr Kelly wrote a letter to Central Bank Governor Patrick Honohan to say "the level of increase is neither acceptable to our members nor sustainable for our sector".

A new levy rise needs Ministerial approval, and in a written Dail reply to Fianna Fail's Michael McGrath and others Minister Noonan said he has not made any decision and is aware of the issues raised by the associations. Mr Noonan admitted that in some cases, the increase in levies is "significant" and that the Central Bank "has attributed the proposed increase to both a proliferation of legislative regulation/regulatory activity and an increase in staff pension costs".

The Central Bank said yesterday that "the cost of regulation has grown over recent years, particularly due to [its] increased regulatory mandate".

Irish Independent

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