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Insurance Industry

Dáil Éireann Debate, Wednesday - 19 December 2018

Wednesday, 19 December 2018

Questions (122, 148)

Michael McGrath

Question:

122. Deputy Michael McGrath asked the Minister for Finance the number of insurance companies providing latent defects insurance and-or structural guarantees here; if this insurance is available to individual homeowners rather than developers; and if he will make a statement on the matter. [53734/18]

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Michael McGrath

Question:

148. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question Nos. 141 to 144, inclusive, of 11 December 2018, the number of actual properties covered by the 1,595 latent defect and structural warranty insurance policies impacted; if developers have been contacted regarding the failure of a company (details supplied); if each homeowner has been contacted regarding the loss of cover in relation to the failure of the company; and if he will make a statement on the matter. [53944/18]

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Written answers

I propose to take Questions Nos. 122 and 148 together.

At the outset I would like to say that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation, and have no role in the day to day supervision of insurance companies. I have therefore consulted with the Central Bank on the matters raised by the Deputy.

Latent defect insurance is a form of insurance taken out in respect of specific new-build premises to provide cover in the event of an inherent defect in the design, workmanship or materials becoming apparent after practical completion. It is commonly sold to developers when constructing housing developments and is generally valid for an extended period of time after completion, typically ten years. The Central Bank has advised me that the prudential returns of insurers do not provide a breakdown of information at this product level, and therefore it is not possible to ascertain the number of companies providing latent defects insurance in Ireland.

In relation to number of actual properties covered by the 1,595 latent defect and structural warranty insurance policies sold by Alpha, the Central Bank has informed me that the exact breakdown of properties covered by the policies is not currently known. The Central Bank continues to work closely with the Danish Financial Supervisory Authority (DFSA) and the insolvency administrator in respect of Alpha Insurance DAC (Alpha).

The Central Bank has advised that the claims handler (BCR Legal Group Limited) confirmed in September that it had written to the developers who had purchased these latent defects policies. The Bank also indicated that BCR were due to write to all homeowners affected by the liquidation of Alpha by the end of September 2018.

The Danish Guarantee Fund continues to provide country-specific updates of the latent defects policies on https://alphagroup.dk.

The Central Bank of Ireland has also published information in relation to Alpha, which it will update if further information becomes available.

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