Dáil Éireann Debate, Thursday - 1 May 2014
40. Deputy Billy Timmins asked the Minister for Finance the position regarding Setanta Insurance policy holders who have been informed that the company has gone into liquidation and may not be in a position to meet any or all of its claims in the event of them arising (details supplied); and if he will make a statement on the matter. [19750/14]
View answer45. Deputy Michael Lowry asked the Minister for Finance the position regarding the 75,000 Setanta Insurance policy holders here; where they now stand with regard to these policies; the steps to be taken to assist these policy holders; and if he will make a statement on the matter. [19792/14]
View answerI propose to take Questions Nos. 40 and 45 together.
Setanta Insurance Company Limited ("Setanta") is a Maltese incorporated company which was both authorised and prudentially supervised by the Malta Financial Services Authority (MFSA). Setanta was regulated at EU regulatory level in accordance with a directive known as Solvency I which currently places requirements on the amount of regulatory capital European insurance companies must hold against unforeseen events. I understand that Setanta met its EU regulatory obligations and under EU law is therefore entitled to trade across EU borders.
On 16 April, 2014, Setanta Insurance Company Ltd ("Setanta") determined that the company was insolvent. This means that Setanta does not have sufficient funds to be able to honour its full obligations towards claimants, policyholders and other creditors. Policyholders can expect to be given cancellation notification during which period cover will remain in force. While policies will remain valid until the required notice period has been served, it is important to be clear that the amounts due under any claims may not be fully recoverable in all circumstances. In this light, it is important to note that the Central Bank of Ireland has advised all Setanta policyholders to arrange for alternative cover without delay.
The Motor Insurance Bureau of Ireland ("MIBI") has indicated that it intends to accept all third party claims in connection to Setanta policies. MIBI is a non-profit-making organisation which was established by Agreement between the Government and those companies underwriting motor insurance in Ireland. The principal role of MIBI is to compensate innocent victims of accidents caused by uninsured and unidentified vehicles.
First party claims on personal insurance policies will be payable from the Insurance Compensation Fund (ICF). Claimants will be eligible for 65% of the amount due or €825,000, whichever is the lesser. Under Section 3.6 of the Insurance Amendment Act 1964 (as amended) first party claims by a body corporate or unincorporated body are not covered by the ICF. The refund of premiums for commercial and personal insurance policies is not covered by the ICF or MIBI. A portion of the premium refunds may, however, be available upon completion of the Setanta liquidation. Until otherwise advised those policyholders which have been affected by the collapse should continue to contact to Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300) or on support@setantainsurance.com.
The Central Bank is in ongoing contact with the Malta Financial Services Authority in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims. The Central Bank has been engaging with over 230 brokers who were offering policies from Setanta Insurance to consumers to require them to immediately contact any Setanta policyholder and inform them of the urgency to make alternative motor insurance arrangements.
I am informed that Insurance Ireland made arrangements for their member insurance companies to be open over the Easter period to assist Setanta policyholders in arranging cover. In addition, the Insurance Ireland 'Declined Cases Agreement' was available to policyholders of Setanta. The current Declined Cases Agreement was drawn up in 1981 and is adhered to by all motor insurers in Ireland. I am informed that under the agreement, the insurance market will not refuse to provide insurance to an individual seeking insurance, if he/she has approached at least three insurers and has not been able to obtain cover from them. I understand that Insurance Ireland is also making information available to those who have queries, complaints or difficulties in relation to this matter through their service at (01) 676 1914 or by email at info@insuranceireland.eu.
