Tuesday, 26 March 2019

Questions (242)

Michael McGrath


242. Deputy Michael McGrath asked the Minister for Finance the communication the Central Bank has had with homeowners who have lost cover for latent defect insurance after the failure of a company (details supplied); the alternative latent defect insurance that has been organised for each household impacted by the failure; the number of households that have had alternative cover organised; the number that have not; and if he will make a statement on the matter. [14237/19]

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Written answers (Question to Finance)

The Central Bank has advised my Department that it was notified by the Danish Financial Supervisory Authority ("Danish FSA") on 7 March 2018 that it (Danish FSA) had ordered Alpha Insurance A/S (“Alpha”) to cease writing new business including renewal of existing contracts and business with immediate effect. The Central Bank was further notified on 9 May 2018 by the Danish FSA that the liquidators of the insurance company Alpha had filed a petition for bankruptcy.

As Alpha is a Danish-based insurance firm, it is subject to prudential supervision by the Danish FSA, and therefore the Central Bank had no role in this decision. 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.

According to the information for Irish policyholders, published on Alpha’s website https://alphagroup.dk, on 26th June 2018, the insolvency estate commenced the distribution of information notices, to all policyholders and claimants of Alpha Insurance A/S in bankruptcy in Ireland.

The information notice contains information on the termination of insurance policies, the Danish Guarantee Fund (Garantifonden for Skadesforsikringsselskaber), information regarding the reporting of claims to the insolvency estate and the procedure for reporting new claims.

The insolvency administrator (Boris Frederiksen from Kammeradvokaten/Poul Schmith,) provided figures to the Central Bank in December 2018 on the latent defect policies. At that time, the total number of policies was 1,617, of which 1,163 were 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; "BCR") confirmed to the Central Bank 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 as 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.

The Central Bank has advised that as the issue of alternative latent defect insurance is a commercial matter it does not have any information as to the number of policyholders that may have had alternative cover organised.

My officials will however contact the insolvency administrator’s office and the appointed claims handler BCR to see if any more specific information can be obtained and I will write to the Deputy with whatever response I receive.

Question No. 243 answered with Question No. 197.