The Deputy should note that neither my Department nor the Central Bank has information on the number of persons who had latent defect insurance with the now bankrupt Danish insurer, Alpha, and who have since organised alternative insurance. The private and commercial nature of these arrangements means that such information is not publicly available.
In a recent parliamentary question response to the Deputy, I indicated that my officials would contact BCR Legal Group and the Danish insolvency administrator to seek further information in relation to policyholders in Ireland affected by the liquidation of Alpha. In response, my Department has been informed that BCR Legal Group figures show that there were 1,588 policies sold to developers in respect of properties in Ireland. Of these, 1,147 certificates were issued to developers for passing onto homeowners once the properties were sold.
BCR also informed my Department that it is exploring the possibility of the transfer of UK-issued Alpha policies to a new insurer under the UK financial services compensation scheme, FSCS. It should be noted that the insurance compensation fund, ICF, does not cater for such a situation under the Insurance Act 1964, as amended. However, even more relevant is that even if the ICF did facilitate such a scenario, my understanding is that given the nature of this business, it is likely there would be considerable practical difficulties with another insurer providing this cover retrospectively.
Additional information not given on the floor of the House
The background to this case, as the Deputy is aware, is that the Danish Financial Supervisory Authority, Danish FSA, on 7 March 2018 notified the Central Bank that it had ordered Alpha Insurance A/S, Alpha, to cease writing new business, including renewal of existing contracts and business, with immediate effect. It further advised the Central Bank on 9 May 2018 that the liquidators of the insurance company Alpha had filed a petition for bankruptcy. As Alpha was a Danish-based insurance firm, and therefore subject to prudential supervision by the Danish FSA, the Central Bank had no role in this decision. Alpha was selling non-life insurance policies in Ireland through the broker network on a freedom-of-services basis and it also operated in Denmark, France, Germany, Greece, Italy, Norway, Spain and the United Kingdom. According to the information for Irish policyholders, published on Alpha’s website, https://alphagroup.dk, on 26 June 2018, the insolvency estate commenced the distribution of information notices to all policyholders and claimants of Alpha in bankruptcy in Ireland. The information notice contains information on the termination of insurance policies, the Danish guarantee fund for claimants owed money, information regarding the reporting of claims to the insolvency estate and the procedure for reporting new claims.
The claims handler for Alpha in Ireland and the UK, BCR Legal Group, confirmed to the Central Bank that its representative, CRL, wrote to the developers who had purchased these latent defects policies, on two occasions. The purpose was to advise that Alpha had been placed in bankruptcy, that polices would be cancelled from 11 August 2018, and to request details of the owner of the properties insured under these policies. BCR subsequently wrote to all homeowners affected by the liquidation of Alpha following receipt of their details from the developers to advise that, as Alpha had gone into liquidation, its latent defects policies had been terminated and that they should consider replacing this policy. BCR also provided these homeowners with an information sheet from the liquidators.