Dáil Éireann Debate, Wednesday - 5 July 2017
29. Deputy Robert Troy asked the Minister for Finance if claimants of an insurance company similar to a company (details supplied) would receive 100% compensation from both the liquidation process and the insurance compensation fund if that company were to go into liquidation; if claimants of the company will be treated in the same way; and if he will make a statement on the matter. [31481/17]
View answerFollowing on from the Supreme Court decision on Setanta, it is my intention to bring certainty to the structure of the compensation framework in the future, particularly in the event of a liquidation of an insurer that is providing motor insurance in the State. In order to achieve this certainty, draft Heads of a Bill to amend the Insurance Act have been prepared and will be brought to Government shortly. The proposed Bill is based on the recommendations of the Review of the Framework for Motor Insurance Compensation in Ireland which was approved by Government last July.
When implemented this legislation will reflect the recommendations of the Review and will ensure all third-party motor insurance claims will be covered in future, in line with the Motor Insurers Bureau of Ireland limits. This will mean that in most cases there will 100% compensation. In addition, the new regime will provide greater efficiencies and oversight of the process, particularly with the involvement of the State Claims Agency.
In relation to Setanta, over and above the 65% ICF payment, it is expected that a proportion of the balance of money due to third party claimants will be met from the proceeds of the distribution of Setanta’s assets on completion of the liquidation process. However, it is not possible to say definitively at this stage what proportion of the claims this will amount to, but current indications are that this is unlikely to be sufficient to cover all of the 35% gap. In this regard, a preliminary assessment was carried out by Towers Watson in 2014 who indicated that the Liquidator would not be in a position to meet more than 30% of claims out of the assets of the liquidation. The Liquidator has informed the Department that as the Supreme Court has now made its judgment, a new actuarial report is being commissioned. The Liquidator does not currently have a timeline for its completion but he anticipates that he should have a clearer picture on this matter shortly.
The Government will review further the payment of compensation to Setanta claimants once the updated actuarial report on the available proceeds of the assets for distribution from the liquidation process is concluded. This will provide a good indication of the extent of the shortfall (i.e. the difference between the full amount due and the combined total of the 65% payment plus the Setanta distribution).
