Dáil Éireann Debate, Thursday - 15 May 2014
60. Deputy Pearse Doherty asked the Minister for Finance the reason the two-month notice period under the Consumer Protection Code 2012 was not applied in the case of the customers on Setanta Insurance. [21909/14]
Amharc ar fhreagraSetanta 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, the firm is supervised by the Central Bank for conduct of business rules, i.e. consumer protection obligations. The Central Bank is in contact with the MFSA in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information.
On 16 April 2014, 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. Setanta was formally placed into liquidation by the MFSA following a meeting of the creditors which took place on the 30 April 2014 where a liquidator, Mr Paul Mercieca, was appointed. Officials from my Department together with officials from the Central Bank met with the Liquidator and his representatives in Ireland on 7 May 2014. At that meeting, the Liquidator confirmed that all policyholders who have not already done so should arrange alternative cover without delay as claims are unlikely to be paid in full and once the notice period has expired all policies will be cancelled by the Liquidator. While the position on each policy is for the Liquidator to decide in due course, on Friday, 9 May the Liquidator placed notices in national newspapers which advised policyholders that all Setanta policies of insurance will be cancelled by way of 7 days' notice or 10 days' notice to policyholders in accordance with their policy documents.
In the circumstances, I would strongly advise policyholders that it is no longer in their best interest to maintain policies with Setanta as the company is not in a position to meet claims in full. This is in order to avoid prolonging a situation where policyholders would continue to drive vehicles insured by Setanta in circumstances where their potential claims are unlikely to be paid in full. The Central Bank has also advised all Setanta Policyholders to make alternative insurance arrangements without delay to avoid this situation, as they believe this is in their best interest.
The Deputy makes particular reference to the two months' notice period required to be made under Consumer Protection Code. While it would be preferable that a two month period would be available to consumers to make alternative arrangements, the Consumer Protection Code 2012 is clearly intended for situations where regulated entities are in a position to provide such notice, i.e. in the cases of mergers and transfers, and not in the case of an insolvent liquidation.
The Liquidator has advised that arrangements are in hand for policyholders to obtain their "no claims bonuses" certificates from Setanta. Insurance Ireland have informed me that these certificates will be honoured by other insurers.
In addition, the Insurance Ireland 'Declined Cases Agreement' is 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.
Until otherwise advised those policyholders which have been affected by the collapse of Setanta should continue to contact Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300) or on support@setantainsurance.com.
