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, 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 since November 2013 when it identified issues during a consumer protection themed inspection. As the issues at Setanta were prudential in nature and as the firm was prudentially supervised by the MFSA, the Central Bank referred matters to that Authority for further investigation.
A widely reported press release was issued by Setanta Insurance on January 27th 2014 which stated that the insurer had resolved to cease carrying on the business of insurance, including further renewals of existing business, with effect from close of business of 24 January 2014. Setanta then appointed Heritage Insurance Management (Malta) Limited to undertake the run-off process and the insurer advised the MFSA accordingly. The details and operation of this run off process is a prudential matter overseen by the home regulator, the MFSA.
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.
In my role as the Minister for Finance, I have responsibility for the development of national policy and the legal framework governing insurance regulation. I have no role with regard to the investigation of possible conflict of interest issues.
The Central Bank has advised me that it has not investigated conflicts of interest in Setanta and is working to ensure that Setanta policyholders are being communicated with by the liquidator and that consumers are aware of the need to get alternative cover.