Dáil Éireann Debate, Thursday - 8 May 2014
47. Deputy Ciara Conway asked the Minister for Finance in relation to policy holders with Setanta Insurance, if they will get their money back in the wake of the collapse of this company; if he will clarify the situation in respect of no claims bonus; if this will be affected; if policy holders will receive a refund; and if he will make a statement on the matter. [20714/14]
View answer48. Deputy Ciara Conway asked the Minister for Finance with respect to third party claimants of Setanta Insurance, if the matter proceeds to the High Court and an award is made will third party claimants be entitled to receive 100% of this claim; and if he will make a statement on the matter. [20716/14]
View answerI propose to take Questions Nos. 47 and 48 together.
Under EU law which governs non-life insurance, an insurer is required to inform the regulator in its home Member State (its home regulator) that it intends to pursue business in another Member State. The home regulator must then provide the host regulator with a certificate attesting that the insurer covers the EU Solvency Capital Requirement, as well as the nature of the business which the insurer intends to undertake. The insurer may start to pursue business from the date that the certificate is communicated to the host regulator, in this case the Central Bank of Ireland.
Setanta Insurance Company Limited ("Setanta") is a Maltese incorporated company which was both authorised and prudentially supervised by the Malta Financial Services Authority (MFSA). While its financial position is not supervised by the Central Bank of Ireland as the Central Bank has no role in that regard, the firm is supervised by the Central Bank for conduct of business rules, i.e. consumer protection obligations. The Central Bank is in contact with the MFSA in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims.
On 16 April 2014, 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. Setanta was formally placed into liquidation by the MFSA following a meeting of the creditors which took place on the 30 April 2014 where a liquidator, Mr. Paul Mercieca, was appointed. Officials from my Department together with officials from the Central Bank met with the Liquidator and his representatives in Ireland on 7 May 2014. At that meeting, the Liquidator confirmed that Setanta will not be in a position to pay the full amount of claims. It is also unlikely that a pro-rata portion of premiums will be refunded upon completion of the Setanta liquidation.
While the position on each policy is for the Liquidator to decide in due course, all claims must be treated in the same way by the Liquidator. The Liquidator has advised that he intends to place notices in national newspapers shortly and to send letters to policyholders advising them of cancellation of policies next week. It would be prudent for Setanta policyholders to make alternative motor insurance arrangements, as soon as possible, as advised by the Central Bank.
The Motor Insurance Bureau of Ireland (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. If, for legal reasons, MIBI is not in a position to accept a claim, these third party claims will be eligible to proceed for consideration by the High Court for compensation from the Insurance Compensation Fund (ICF). Claims on personal insurance policies will be payable from the ICF. ICF payments are subject to the limit of 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 either commercial and personal insurance policies is not covered by the ICF or MIBI.
The Liquidator advised that arrangments are in hand for policyholders to obtain their "no claims bonus" certificates from Setanta. Insurance Ireland have informed me that these certificates will be honoured by other insurers. Until otherwise advised those policyholders which have been affected by the collapse should continue to contact Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300) or on support@setantainsurance.com.
