The liquidation of an insurance company is a legally complex process. Setanta is a Maltese incorporated company and therefore, the Setanta liquidation is being carried out under Maltese law.
Progress in the liquidation of Setanta has been awaiting the outcome of legal proceedings in the case of Law Society of Ireland v the Motor Insurers' Bureau of Ireland (MIBI). On 4 September 2015, the High Court held that MIBI's liability under the Motor Insurers' Bureau of Ireland Agreement 2009 extended to situations of insurer insolvency (subject to each individual claim being deemed eligible under the 2009 Agreement). This decision was appealed by the MIBI and the Court of Appeal upheld the High Court decision. The MIBI was granted leave to appeal the decision to the Supreme Court. That appeal was heard before the Supreme Court on 24 and 25 October 2016 and judgement has been reserved.
The Liquidator for Setanta has informed me that:
- As of 30 November 2016, the number of open claims was 1,666.
- The claims reserves position stands at between €87.7 million and €95.2 million.
- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal, particularly third party claims
- The Liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims
- The Deputy should note that the Insurance Compensation Fund, with the assistance of the Liquidator, has been recently able to make 65% payments totalling €608,085 on the first party damage claims made by Setanta policy holders where they had comprehensive insurance in place.
- The basis for the ICF being able to make these payments in advance of the Supreme Court's ruling is that these being first party damage claims they come within its remit rather than that of MIBI which is responsible for third party claims i.e. claims against Setanta policy holders.
- In summary therefore, the position in relation to third party motor insurance claims is that they are unlikely to be processed until after the outcome of the Supreme Court appeal.
- I expect to be able to provide a more accurate update after the legal proceedings are concluded.
