Noonan and Regulator must take responsibility for Setanta mess - Pearse Doherty TD
Sinn Féin Finance Spokesperson Pearse Doherty TD has said Minister Micheal Noonan and the Financial Regulator must take responsibility for the mess and confusion caused by the collapse of Setanta Insurance.
Deputy Doherty said:
“Last week in reply to my questions Minister Noonan stated that the Financial Regulator was aware of problems at Setanta since November and that Minister Noonan was made aware of these issues in January.
“Minister Noonan also indicated to me that ‘Policyholders can expect to be given two months cancellation notification (in accordance with the Central Bank of Ireland's Consumer Protection Code 2012) during which period cover will remain in force’.
"Today the company has said it is issuing cancellation notices , effective within seven to ten days.
“It seems that Setanta have simply ignored all Irish regulation and the Minister and Regulator have been left looking foolish. They must now take responsibility and stand up for those policy holders left with only a short notice period to find another insurer.
“I said last week the Minister and Regulator had questions to answer. Today it has become even more urgent that they answer why they didn’t act months ago and why the Consumer Protection Code is not being enforced.”
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.
99. To ask the Minister for Finance the options available to customers affected by the collapse of the Setanta Insurance company; and if he will make a statement on the matter. [19416/14]
Michael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
I propose to take Questions Nos. 78 and 99 together.
On Wednesday 16thApril, 2014, Setanta Insurance Company Ltd ("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. It is expected that Setanta will be formally placed into liquidation by the Malta Financial Services Authority in the coming days. Policyholders can expect to be given two months cancellation notification (in accordance with the Central Bank of Ireland's Consumer Protection Code 2012) during which period cover will remain in force. While policies will remain valid until the required notice period has been served, it is important to be clear that the amounts due under any claims may not be fully recoverable in all circumstances. In this light, it is important to note that the Central Bank of Ireland has advised all Setanta policyholders to arrange for alternative cover without delay.
The Motor Insurance Bureau of Ireland ("MIBI") have indicated that they intend to accept all third party claims in connection to Setanta policies. MIBI is a non-profit-making organisation which was established by Agreement between the Government and those companies underwriting motor insurance in Ireland. The principal role of MIBI is to compensate innocent victims of accidents caused by uninsured and unidentified vehicles.
First party claims on personal insurance policies will be payable from the Insurance Compensation Fund (ICF) once Setanta is formally placed into liquidation. Claimants will be eligible for 65% of the amount due or €825,000, whichever is the lesser. Under Section 3.6 of the Insurance Amendment Act 1964 (as amended) first party claims by a body corporate or unincorporated body are not covered by the ICF.
The refund of premiums for commercial and personal insurance policies is not covered by the ICF or MIBI. A portion of the premium refunds may, however, be available upon completion of the Setanta liquidation.
Until otherwise advised those customers which have been affected by the collapse should continue to contact to Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300) or on firstname.lastname@example.org.