Dáil Éireann Debate, Tuesday - 22 January 2019
129. Deputy John Curran asked the Minister for Finance if the way in which insurance cover could be put in place for customers of a company (details supplied) that had previously latent defect and structural warranty insurance with this company before it ceased trading will be examined; his plans to facilitate arranging insurance cover for the customers; and if he will make a statement on the matter. [2749/19]
View answerAt 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 . The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks. Neither I, as Minister for Finance, nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses.
In preparing a response to this PQ, my officials sought an update from the Central Bank of Ireland on Alpha Insurance. The Central Bank has advised me that it was notified by the Danish Financial Supervisory Authority ("DFSA") on 7 March 2018 that the latter had ordered Alpha Insurance A/S (“Alpha”) to cease writing new business including renewal of existing contracts and business with immediate effect. It was further notified on 9 May 2018 that the liquidators of the insurance company Alpha had filed a petition for bankruptcy.
The Central Bank has also indicated that as Alpha is a Danish-based insurance firm, it is subject to prudential supervision by the DFSA, and therefore it had no role in this decision. It has also informed me that Alpha was selling non-life insurance policies in Ireland through the broker network on a freedom of services basis and that it also operated in Denmark, France, Germany, Greece, Italy, Norway, Spain and the United Kingdom.
The insolvency administrator has provided updated figures to the Central Bank as of December 2018 on the latent defects policies. Present figures stand at 1,617 policies, 1,163 of which are currently with the homeowner (these policies were transferred from the developer to the homeowner following completion of the build). The remaining 454 policies were on houses that were not finished and therefore the policy had not transferred to a homeowner at the time of the liquidation i.e. the policy remained with the developer.
The claims handler (BCR Legal Group Limited) confirmed that its representative CRL wrote to the developers who had purchased these latent defects policies, on two occasions, to advise that Alpha had been placed in bankruptcy, that polices would be cancelled from 11 August 2018 and to request details of the owner of the properties insured under these policies. BCR subsequently wrote to all homeowners affected by the liquidation of Alpha, following receipt of their details from the developers, to advise that Alpha had gone into liquidation, their latent defects policies had been terminated and that they should consider replacing this policy. BCR also provided these homeowners with an information sheet from the liquidators. BCR can be contacted at policyupdates@bcr.co.uk.
It should be noted that the Danish liquidator of Alpha 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.
In conclusion, I acknowledge that this is an unfortunate position that these householders have found themselves in however as Minister for Finance I am not in a position to facilitate the arranging of new insurance cover.
