I propose to take Questions Nos. 170 to 172, inclusive, together.
Setanta Insurance Company Limited (Setanta) is a Maltese incorporated company subject to prudential supervision in Malta by the Malta Financial Services Authority (MFSA). Its financial position is not supervised by the Central Bank of Ireland and the Central Bank has no role in that regard. The Central Bank have informed me that they have been in discussions with the MFSA in relation to Setanta since November 2013 when the Central Bank identified issues during a consumer protection themed inspection and immediately referred the matter to the MFSA for further investigation. The Central Bank have also informed me that there was regular contact in the following months which led to the announcement in January, 2014 that the firm would cease writing new business and issuing further renewals.
The Central Bank wrote on the 16th January 2014 to advise my Department of their concerns with Setanta's solvency margin and I was subsequently informed of this. A widely reported press release was issued by Setanta Insurance on January 27th 2014 which stated that the insurer had resolved to cease carrying on the business of insurance, including further renewals of existing business, with effect from close of business of 24 January 2014. Setanta then appointed Heritage Insurance Management (Malta) Limited to undertake the run-off process and the insurer advised the MFSA accordingly. The details and operation of this run off process is a prudential matter overseen by the home regulator, the MFSA.
I am advised that contact continued between the Central Bank and the MFSA and, on 11 April 2014, the MFSA advised the Central Bank that the directors of Setanta were considering the potential liquidation of the company. There was ongoing contact over the following days. Setanta announced that the shareholders had recommended the appointment of a liquidator on 16 April 2014 subject to approval of the MFSA. On April 16th I was advised that the shareholders of Setanta had resolved to wind up the company and a liquidator had been provisionally appointed. The Central Bank is in ongoing contact with the Malta Financial Services Authority (MFSA) in relation to Setanta Insurance Company Limited.
The Central Bank has also been engaging with the brokers who sold the policies to ensure they assist policyholders and keep them informed. 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. The Central Bank as well as the Department of Finance have also liaised with the relevant industry representative bodies.
My Department and the Central Bank will be reviewing the circumstances relating to Setanta and will be reporting to me on what lessons can be learnt and how the framework can be strengthened. The European Commission has also indicated that it will review whether any issues raised relating to the regulatory framework require action.