asked the Minister for Industry and Commerce if, in relation to the insurance company called PMP A he will state the estimated shortfall and the estimated liabilities of the company in October 1983; the suggested under-provision for outstanding and unsettled claims at 31 December 1981 and 31 December 1982; if he will confirm that a London-based firm of actuaries carried out an independent assessment of the 1982 reserves of the company; the outcome of their investigation; the estimated liabilities of the company at 31 December 1983; the cost of 1978-83 claims paid in 1984; and when it is proposed to return the company to the shareholders.
Written Answers. - Insurance Company.
18.
Limerick East): In October 1983, when the PMPA was placed under administration, the shortfall on provisions for claims was estimated by a firm of consultants appointed by the Minister at approximately £100 million as at 31 December 1982. The consultants' estimate in respect of 31 December 1981 was £65 million. The liabilities for claims as of 31 December 1982 were estimated at approximately £160 million, compared with a figure of £60 million shown in the former management's statutory returns for 1982 to my Department.
The estimated figures mentioned were arrived at by the consultants on the basis of a limited examination of the company's outstanding claims provisions. A London-based firm of actuaries carried out a similarly limited exercise and confirmed the existence of a substantial shortfall. Both consultancy reports formed the basis for the Minister's petition to the High Court in October 1983 for the appointment of an administrator. It is relevant to point out that the findings of those reports were not contested by the former management when the appointment of the administrator was being confirmed by the High Court on 14 November 1983.
The estimated liabilities in respect of claims at 31 December 1983 as shown in the administrator's accounts for 1983 were £221 million. The cost of 1978 to 1983 claims paid in 1984 was £73.8 million and further reserves of £128.2 million were held at end 1984 for claims remaining to be settled at that date.
There is no prospect of the return of the company to the shareholders until it ceases to be dependent on support from the insurance compensation fund to pay off the backlog of outstanding claims, which will take a further period of years. Even then, shareholders cannot expect to recover any of their investment as, under the Insurance (No. 2) Act, 1983, any sum paid out of this fund to the company represents a debt of the company.