I propose to take Questions Nos. 30 and 42 together.
At the outset, I would like to say that both I, as Minister for Finance, and the Government are concerned over the situation that arose with regard to the Irish policyholders of Setanta Insurance Company Limited (Setanta). My Department and the Central Bank will be reviewing the circumstances relating to Setanta and will be reporting to me on what lessons can be learnt and how the framework can be strengthened. The European Commission has indicated that it will also review whether any issues raised relating to the regulatory framework require action.
In my role as the Minister for Finance, I have responsibility for the development of the legal framework governing financial regulation in Ireland. The day to day responsibility for the supervision of Irish authorised financial institutions is a matter for the Central Bank of Ireland which is statutorily independent in the exercise of its regulatory and supervisory functions.
In October 2013 the Central Bank undertook a consumer protection inspection of Setanta.
The Central Bank became aware of prudential issues in the course of this investigation and subsequently shared these with the MFSA, Setanta's prudential regulator, in November 2013. At this point, and in line with its role, the Central Bank entered into a phase of heightened contact with the MFSA in relation to these issues.
Setanta is a Maltese incorporated company and was subject to prudential supervision in Malta by the Malta Financial Services Authority (MFSA) in accordance with the legal regime applied across all of the Member States by the relevant European directives. Therefore, the MFSA, and not the Central Bank, is the appropriate authority to comment on the financial position of Setanta.
The extent of the Central Bank's regulatory responsibility in respect of Setanta, in accordance with the legal regime applied across all of the Member States by the relevant European directives, is limited to the area of consumer protection. The current focus of the Central Bank is to ensure that Setanta policyholders are being communicated with by the liquidator and that consumers are aware of what to do in terms of seeking alternative cover. The Central Bank has had extensive contact with the Maltese Regulator and the Liquidator of Setanta Insurance in this regard.
The Central Bank has advised me, regarding both its ongoing and specific communications with the MFSA, that it maintains ongoing supervisory contact with regulators throughout Europe as part of its regulatory approach. As part of this approach it had Regulator to Regulator contact with the MFSA in September 2013.
In January 2014 an announcement was made by the Maltese Regulator that the firm would cease writing new business and issuing further renewals. That MFSA public notice stated that Setanta had ceased carrying on business of insurance, including the renewal of existing business, in terms of the Insurance Business Act with effect from 24 January 2014 and that Setanta had appointed Heritage Insurance Management (Malta) Ltd to carry on the run-off of its business. That notice did not advise that it would be business as usual for claims settlement.