Financial Regulator knew about issues at Setanta in November and Minister Noonan knew in January – Pearse Doherty TD
Sinn Féin Finance spokesperson Pearse Doherty TD has said that the Financial Regulator knew about issues at Setanta Insurance in November and that Minister Noonan was made aware in of these problems in January. The company has since gone into liquidation leaving 75,000 policy holders without insurance cover.
Deputy Doherty received this information in reply to a parliamentary question.
“The news two weeks ago that Setanta Insurance was in difficulty came as a shock to the 75,000 policy holders- many of them self-employed people with commercial insurance. It now appears that the Financial Regulator and Minister Noonan were aware for months that there were potential problems at Setanta.
“It has been reported that even since the Minister and Regulator became aware that the company was in difficulty it had still been selling insurance. The legality of this practice and the extent to which the Regulator and Department were aware of it must be questioned. I will be raising this issue with the Minister next week in the Dáil.
“I welcome the news from Minister Noonan that the Motor Insurance Bureau of Ireland will accept all third party claims connected to Setanta policies. I understand that first party claims can be made to the Insurance Compensation Fund which can cover 65% of most claims.
“Minister Noonan has accepted there is a need to review the regulations at EU level that allowed this Maltese based company operate in Ireland when it clearly was not fit to do so.
“The fact that the Minister and Financial Regulator were aware of potential issues for months raises grave questions about how they handled the situation and whether the rights of policy holders were fully respected.
“This delay in informing customers adds to the case for a solution that does not penalise the customers.”
QUESTION NO: 103
DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Pearse Doherty
for WRITTEN ANSWER on 30/04/2014
To ask the Minister for Finance the date on which he became aware of difficulties at Setanta Insurance; the date on which the Financial Regulator became aware of difficulties at the company; and if he will make a statement on the matter.
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. 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 21st 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 the renewal 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.
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 on 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.