Dáil Éireann Debate, Tuesday - 28 February 2017
221. Deputy Michael McGrath asked the Minister for Finance the progress that has been made in respect of the liquidation of a company (details supplied); if those caught up in outstanding claims are facing any losses; the role of the insurance compensation fund; the role of the Motor Insurance Bureau of Ireland; the current estimate of the number and value of outstanding claims and the shortfall; and if he will make a statement on the matter. [10001/17]
Amharc ar fhreagraSetanta was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. Setanta is a Maltese incorporated company and therefore, the Setanta liquidation is being carried out under Maltese law. The most recent figures received by the Department of Finance from the Liquidator for Setanta is that the number of open claims is 1,658.
Progress in the liquidation has been delayed due to court proceedings in the case of Law Society of Ireland v the Motor Insurers' Bureau of Ireland (MIBI). The current position is that we are awaiting the outcome of MIBI's appeal to the High Court ruling, which was heard before the Supreme Court in October 2016. No date has been specified for the judgment.
In relation to whether any outstanding claims are facing losses, it should be noted that prior to this court case, we would have expected the Insurance Compensation Fund to have met the third party claims up to a limit of 65% and a ceiling of €825,000 per claimant. In such a situation the third party claimants would have suffered a loss due to the cap. However if the High Court ruling is upheld then the MIBI will compensate third parties fully up to a limit of €1,220,000 per claim for property, regardless of the number of claimants, while there will be no cap on payments for personal injury claims.
As the Deputy is aware, a small number of additional claims are not affected by the court proceedings and are being processed by the Office of the Accountant of the Courts of Justice due to the fact that they are 1st party claims and come unambiguously within the remit of the Insurance Compensation Fund (ICF). In relation to these policyholders the cap of 65% applies and in total €608,085 has been made to date to such Setanta policyholders.
The position in relation to 3rd party motor insurance claims is that they are unlikely to be processed until after the outcome of the Supreme Court appeal.
The Liquidator for Setanta has informed me that:
- Claims provision required stands at between €87.7 million and €95.2 million.
- Setanta policies were cancelled in May 2014. The 2 years allowable under the statute of limitation to lodge claims has expired so the claims figures will not increase further.
- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal.
- The Liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims.
I expect to be able to provide a more accurate update after the legal proceedings are concluded.
