The Tanaiste will examine whether it will be possible to get compensation for Irish businesses left without cover after the collapse of Independent Insurance. Ms Harney said her Department was exploring the implications for Irish firms involved with failed UK insurer Independent Insurance Group.
She said she was in talks with the Attorney General's office, the UK authorities and the EU Commission on the matter.
Ms Harney told the Dail yesterday that Irish taxpayers could not be expected to bail out firms that "go to the wall". But she said there was an £18 million surplus in the fund set up to rescue the PMPA and her Department was examining how this might be used. A Department spokeswoman later ruled out the use of this fund as Independent Insurance was not an Irish company.
British creditors of the company yesterday set up an action group to win compensation for the "hundreds of millions of pounds" they claim they have lost. Led by a group of insurance brokers it intends to pursue Independent's auditors and actuaries for compensation.
The company had been operating in the Republic for the last three years and set up an Irish branch in Dublin last year. Its main business was employer's liability insurance and it reportedly insured several large companies in Ireland, many involved in the construction sector. "Everybody wants a sympathetic solution, within reason," Ms Harney said, adding it was "not acceptable that any country can exclude the consumers of another from policy protection".
Ms Harney was referring to Irish corporate customers not being eligible for compensation from the Policyholders' Protection Board, as employers' liability insurance is not compulsory in Ireland.
Fine Gael leader Mr Michael Noonan said it was a "ridiculous position" for the Minister to believe the British board should be compelled by the EU to protect consumers in Ireland.
Mr Noonan, who raised the issue in the Dail, said it was surely the Government's responsibility to have a board in place to protect Irish consumers in the same way Britain did.
Ms Harney said there was a 1992 EU directive that a Government could not discriminate in favour of its own citizens and against citizens of another EU state.
She added that under the EU directive, once an insurance company was licensed in one member-state it could practice throughout the EU and "therefore the Irish regulatory authorities have no supervisory role in regard to this insurance company".
Some EU countries "do not supervise such insurance companies and therefore there must be European-wide protection to address such a situation for consumers".
While steps were taken to get companies to take up insurance at "extravagant premiums", the insurance industry would not cover outstanding claims, some of which could be devastating, Mr Noonan said.
Representatives of the Irish Insurance Federation are due to meet the Minister of State with responsibility for insurance, Mr Noel Treacy, today.
Mr Noonan had warned "a number of significant Irish companies in the construction industry may go down if a large award is made against them".
He called for a Government commitment that "companies in Ireland will not be disadvantaged to a greater extent than those in the UK, where the Policyholder Protection Board is underpinning the risk".
