I propose to take Questions Nos. 155 to 157, inclusive, together.
On 28 November, the Central Bank announced that it had been informed that Qudos Insurance A/S had entered into solvent liquidation. Qudos is authorised and regulated by the Danish Financial Supervisory Authority, and therefore the Central Bank had no role in this decision. It is understood that Qudos operated in Ireland on a freedom of services basis and that its products in this country were sold through Patrona Underwriting Ltd.
On 4 December, Qudos published further information that it is no longer paying insurance claims. The Central Bank then issued a statement strongly recommending, based on the uncertainty around the payment of claims, that affected customers should contact their insurance broker to arrange alternative insurance cover. The Central Bank is actively monitoring developments and is liaising regularly with its Danish counterparts, the supervisory authorities of other affected member states and EIOPA.
It is understood that there are approximately 50,000 policyholders in Ireland that have been impacted by the developments with Qudos. Patrona Underwriting has issued a statement saying that policies remain valid and in force until their natural expiry date, however given the current Qudos position and in line with Central Bank recommendations they have provided brokers with options to replace all insurance covers with other providers at no extra cost to consumers.
Early indications suggest that there are in the region of 1,400 claims outstanding in relation to Irish policyholders, but this is subject to confirmation.
I understand that the Danish liquidators are currently continuing their review of the company with a view to determining its underlying financial position. Once this exercise is concluded they will be in a better position to determine whether the company can pay existing claims. It is expected that more information regarding this matter should be available within the next two weeks.
It should be noted that my officials have been in contact with the Danish Finance Ministry, who advise on the basis of information they have received from the Danish Financial Supervisory Authority, that as the company is in solvent liquidation, claims will be met. However, the Ministry also indicated that if ultimately Qudos is placed into bankruptcy, and this happens after 1 January 2019, that the Danish Insurance Guarantee Scheme will not be liable to meet these claims due to a legislative change in May 2018. In such a situation claimants may instead be eligible for cover from the Irish Insurance Compensation Fund (ICF), subject to its terms and conditions and the particular circumstances of the case.
Regarding informing customers who are impacted by the failure of an insurance undertaking, if winding-up proceedings are initiated, in accordance Article 281 with Solvency II Directive (2009/138/EC) “the competent authorities of the home Member State, the liquidator or any person appointed for that purpose by the competent authorities shall without delay individually inform by written notice each known creditor whose habitual residence, domicile or head office is situated in another Member State." I understand that this has happened and that the Central Bank has also instructed the Managing General Agent, Patrona underwriting to inform brokers and policyholders of the temporary stoppage in paying claims.
The Central Bank has advised my Department that all relevant brokers have been contacted and the process of contacting policyholders is ongoing. It has also published information for policyholders on its website and this will be updated as more information becomes available. Furthermore, I understand that brokers are absorbing the administrative costs in arranging the replacement policies.