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Insurance Compensation Fund

Dáil Éireann Debate, Tuesday - 29 May 2018

Tuesday, 29 May 2018

Ceisteanna (166)

Michael McGrath

Ceist:

166. Deputy Michael McGrath asked the Minister for Finance the number of open claims in relation to the liquidation of a company (details supplied); the number and value of outstanding claims in which the claimant has not received compensation; the number and value of outstanding claims in which the claimant has received partial compensation from the Insurance Compensation Fund; the estimated proceeds from the liquidation based on the most up to date information; when the legislation to address the issue will be introduced; and if he will make a statement on the matter. [23202/18]

Amharc ar fhreagra

Freagraí scríofa

Setanta Insurance was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. As it was a Maltese incorporated company, the liquidation is being carried out under Maltese law.

The Deputy will be aware that under the Insurance Act 1964, as amended, monies may be paid out of the Insurance Compensation Fund (ICF), with the approval of the High Court, in relation to an insolvent insurer, to meet claims up to a limit of 65% or €825,000 of the claim, whichever is the lesser.

The Deputy will also be aware of my decision in principle that the State will ensure that Setanta third party claimants are compensated in full, which was announced on 30 January.  My Department has received confirmation from the Office of the Attorney General that there are no state-aid or other legal issues with this decision, and has therefore proceeded with the detailed arrangements to implement it. An additional provision to give effect to this decision is being included in the Insurance (Amendment) Bill, which has now been finalised by my officials in liaison with the Office of Parliamentary Counsel. I expect to bring this Bill to Government for approval to publish shortly. I am hoping that, with the cooperation of Members of the House, the Bill will pass all Stages in an efficient manner. Once enacted, it will allow for the payment of 100% of the compensation due to Setanta third party motor insurance claimants including the additional 35% to those who have settled their claims and have already received compensation of 65% of their claim subject to the limit outlined above.

To date, there have been three applications to the High Court for payment of compensation from the ICF in relation to Setanta Insurance. Orders were granted in the High Court on 11 May 2018, 24 July 2017 and 15 November 2016. The total amount paid out of the ICF on foot of these orders is €14.6 million being 65% of the total value of the settled claims.

The liquidator for Setanta Insurance has informed me that as no settled claims have yet been paid in full, there remain 1,577 active claims of which 826 claimants have been paid compensation from the ICF subject to the 65%/€825,000 limits. A further 117 claimants have settled their claims since the last tranche was submitted to the State Claims Agency for verification. These claims will be included in the next application to the High Court and are to the value of €5.1 million being 100% of the total value of the settled claims.

In addition to this, there are 645 claimants whose personal injuries claims (some of who also have damage claims) have not yet been settled and a further 223 claimants whose damage only claims have not yet been settled. In the case of the numbers of claimants, there may be more than one claimant associated with each claim.

It is important to note that only claims which have been settled can be included in an application to the High Court for payment from the ICF. The process of settling claims is still ongoing and it is hoped that my decision to compensate third party claimants in full will continue to facilitate and accelerate this process.

In relation to the value of claims outstanding it is not possible to answer this question as these claims have not been settled, however as you know, the Liquidator commissioned actuarial consultants, Willis Towers Watson, to carry out an analysis of Setanta Insurance's claims reserves as at 30 June 2017. The report estimates the claims reserves at between €105.9 million and €112.9 million.

A consequence of this is that based on this actuarial report, the liquidator now estimates that he will not be in a position to meet more than 22% of the claims out of the assets of the liquidation once all matters in the liquidation have been concluded, rather than the not more than 30% of claims figure previously indicated. 

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