Dáil Éireann Debate, Wednesday - 30 April 2014
100. Deputy Pearse Doherty asked the Minister for Finance the steps he will take to ensure a smooth transition for customers of Setanta Insurance and all the other policy holders to another insurer or to assist in brokering the deal for another insurer to take over. [19417/14]
Amharc ar fhreagraUnder EU law which governs non-life insurance, an insurer is required to inform the regulator in its home Member State (its home regulator) that it intends to pursue business in another Member State. The home regulator must then provide the host regulator with a certificate attesting that the insurer covers the EU Solvency Capital Requirement, as well as the nature of the business which the insurer intends to undertake. The insurer may start to pursue business from the date that the certificate is communicated to the host regulator, in this case the Central Bank of Ireland.
Setanta Insurance Company Limited ("Setanta") is a Maltese incorporated company which was both authorised and prudentially supervised by the Malta Financial Services Authority (MFSA). While its financial position is not supervised by the Central Bank of Ireland as the Central Bank has no role in that regard, the firm is supervised by the Central Bank for conduct of business rules, i.e. consumer protection obligations. I understand that the Central Bank has been in ongoing contact with the MFSA in relation to Setanta in recent times.
On Wednesday 16 April, 2014, Setanta Insurance Company Ltd ("Setanta") determined that the company was insolvent. This means that Setanta does not have sufficient funds to be able to honour its full obligations towards claimants, policyholders and other creditors. It is expected that Setanta will be formally placed into liquidation by the Malta Financial Services Authority in the coming days. Policyholders can expect to be given two months cancellation notification (in accordance with the Central Bank of Ireland's Consumer Protection Code 2012) during which period cover will remain in force. While policies will remain valid until the required notice period has been served, it is important to be clear that the amounts due under any claims may not be fully recoverable in all circumstances. In this light, it is important to note that the Central Bank of Ireland has advised all Setanta policyholders to arrange for alternative cover without delay.
The Central Bank is in ongoing contact with the Malta Financial Services Authority in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims. The Central Bank is also engaging with the brokers who sold the policies to ensure they assist policyholders and keep them informed.
The provision of motor insurance cover is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are accepting and the making of adequate provisioning to meet these risks. In my role as the Minister for Finance I have responsibility for the development of the legal framework governing financial regulation.
I am infromed that Insurance Ireland made arrangements for their member insurance companies to be open over the Easter period to assist Setanta policyholders in arranging cover. In addition, the Insurance Ireland 'Declined Cases Agreement' was available to policyholders of Setanta. The current Declined Cases Agreement was drawn up in 1981 and is adhered to by all motor insurers in Ireland. I am informed that under the agreement, the insurance market will not refuse to provide insurance to an individual seeking insurance, if he/she has approached at least three insurers and has not been able to obtain cover from them. I understand that Insurance Ireland is also making information available to those who have queries, complaints or difficulties in relation to this matter through their service at (01) 676 1914 or by email at info@insuranceireland.eu. The Central Bank has written to all brokers to instruct them to write to all policyholders that hold a current Setanta motor insurance policy and inform them of the urgency of making alternative motor insurance arrangements.
