Still 1,666 outstanding claims against Setanta Insurance
Dispute ongoing over which compensation body should pay €95m bill for failed insurer
Setanta collapsed in April 2014 and its liquidation is being administered in Malta. Photograph: iStock
Some 1,666 claims associated with failed insurer Setanta had yet to be settled at the end of November 2016, due largely to a dispute over which compensation fund should pick up the bill.
This has emerged in an answer from the Minister for Finance Michael Noonan to a parliamentary question from Fianna Fáil’s spokesman for finance Michael McGrath.
Mr Noonan said the cost of these open claims will be between €87.7 million and €95.2 million but the liquidator has indicated he will only be able to meet about 30 per cent of the costs. He said progress on settling claims had been held up by legal proceedings involving the Law Society of Ireland and the Motor Insurers’ Bureau of Ireland (MIBI).
In September 2015, the High Court held that the MIBI was liable to pay claims arising from any shortfall in the liquidation process. This decision was upheld by the Court of Appeal but the MIBI was granted leave to appeal to the Supreme Court, which heard the matter in October 2016 with judgment reserved.
Insurance Compensation Fund
The MIBI has argued that the Insurance Compensation Fund, which is operated by the State, should meet the cost of the Setanta claims.
Mr Noonan said the ICF, with the assistance of the liquidator, has made payments totalling €608,085 on the first-party damage claims made by Setanta policy holders where they had comprehensive insurance.
He said the ICF made these payments in advance of the Supreme Court’s ruling on the basis that they were first-party damage claims. These come within the remit of the ICF rather than the MIBI, which is responsible for third-party claims.
“In summary, the position in relation to third-party motor insurance claims is that they are unlikely to be processed until after the outcome of the Supreme Court appeal,” Mr Noonan said.
Mr McGrath said it was unacceptable that claims were waiting to be settled almost three years on from the collapse of Setanta.
“Last July, the Minister for Finance laid out a new policy in the area of motor insurance compensation when an insurer is put into liquidation, but it remains unclear when this will be implemented given the opposition to it from the insurance industry,” he said.
“The Government needs to urgently develop and implement a coherent policy on motor insurance before more claimants are left in the lurch, while others can simply no longer afford to remain on the road due to spiralling motor insurance costs.”