Dáil Éireann Debate, Wednesday - 10 December 2014
70. Deputy Michael McGrath asked the Minister for Finance the progress that has been made in respect of the liquidation of Setanta Insurance; if those caught up in outstanding claims are facing any losses; the role of the Insurance Compensation Fund; and if he will make a statement on the matter. [47482/14]
View answerAt the outset I would like to say that I am aware of the difficulties that the liquidation of Setanta Insurance Company Limited has caused for Setanta policyholders and those claiming compensation under Setanta insurance policies. You will appreciate that a liquidation of an insurance company is a legally complex and time consuming process. The situation around the Setanta liquidation is an evolving one and so I propose to set out the position as it currently stands.
The Insurance Compensation Fund (ICF) provides for payments to meet the liabilities of insolvent insurers in certain cases where it is unlikely that claims can be met otherwise than from the ICF. Management and administration of the ICF is under the control of the President of the High Court acting through the Office of the Accountant of the Courts of Justice. Under the Insurance Act 1964, in a liquidation all ICF payments are subject to a limit of 65% of the amount due or €825,000, whichever is the lesser. In addition, claims by bodies corporate or unincorporated bodies are not covered by the ICF, except where there is a liability to or by an individual.
The Accountant, the Liquidator and the State Claims Agency are in the process of agreeing procedures for payments and these will be published as soon as they are agreed. I am informed by the Accountant and the Liquidator that the following recent progress has been made:
- Based on the information available to the liquidator it is not likely that he will be in a position to meet more than 30% of the insurance claims out of the assets in liquidation.
- Therefore, on the basis that the ICF may only pay out up to a maximum of 65% on an eligible individual claim, the question of the possibility of advance payments of 65% on eligible claims to the ICF was examined by the Accountant. The Accountant obtained clarification on the question of whether he could make advance payments of 65% to eligible claimants. He has informed us that having considered legal advice on the operation of the legislation, he is now satisfied that it is appropriate to make applications to the President of the High Court for approval to release monies from the ICF for compensation, prior to completion of the liquidation of the company. Any payment from the ICF will be a once off and final payment.
- The State Claims Agency will provide support to the Accountant in terms of the necessary expertise to ensure that only valid claims are paid out of the ICF and administrative support required to deal with the volume of work arising from the Setanta case.
- The Liquidator has advised that he is aiming to make application to the ICF for outstanding claims early in the New Year 2015 in respect of the following categories of claims:
- Claims where settlements have been agreed between Setanta and the claimant;
- Claims where the Personal Injuries Assessment Board has issued Orders to Pay that have been accepted by Setanta and the claimant;
- Claims which have been subject to court awards.
- The Accountant has advised that he is aiming to make application in respect of this first batch of 300 claims to the President of the High Court before end of March 2015.
Current estimates indicate that the shortfall for most Setanta claimants will be relatively small once they have received the 65% compensation available from the ICF as well as their distribution from the Liquidation. I understand that there is the very small number of large claims where the maximum ICF payment of €825,000 will apply. There is a number of claims by bodies corporate or unincorporated bodies which are not covered by the ICF as there is no liability to or by an individual and these policyholders might anticipate at a maximum 30% of the total amount of any award under the claim. It is not as yet possible for the Liquidator to provide a final figure on the number of such claims.
I appreciate that the current uncertainty regarding the timing of compensation payments is causing difficulty for the former customers of Setanta Insurance and I have asked that information on ICF procedures is made available publicly as soon as possible. The Accountant of the Courts of Justice can only deal with claims which are submitted by the Liquidator, so the advice to all claimants continues to be that they should contact the Liquidator of Setanta.
