Charlie McConalogue (Donegal North East, Fianna Fail)
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165. To ask the Minister for Finance the position regarding policyholders of Setanta Insurance who submitted a claim prior to them going into liquidation; if these persons will be compensated; and if not will they be compensated by a State fund; if so, the way one applies; and if he will make a statement on the matter. [30791/14]

Denis Naughten (Roscommon-South Leitrim, Independent)
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175. To ask the Minister for Finance further to Parliamentary Question No. 58 of 29 May 2014, if he will provide an update on same; and if he will make a statement on the matter. [30985/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 165, 175 and 258 together.

My officials have been in discussions with the Central Bank of Ireland, with the Liquidator of Setanta Insurance Company Limited (Setanta), the Accountant of the High Court and with the insurance industry representative bodies with regard to the position of Setanta policyholders.  We are endeavouring to obtain legal certainty on a number of matters relating to unearned premiums and policyholders' claims for compensation and this will be made publicly available in due course.  When clarification has been received from the Liquidator in the first instance, I will consider what steps, if any, will be appropriate.  At this time, I propose to set out the position as it currently stands. 

Setanta was formally placed into liquidation by the Malta Financial Services Authority (MFSA) on the 30 April 2014 and a liquidator was appointed. Officials from my Department together with officials from the Central Bank met with the Liquidator and his representatives in Ireland on 7 May 2014 and both my Department and the Central Bank are in ongoing contact with him regarding the position of Setanta policyholders. All Setanta policies have now been cancelled by the liquidator in line with the terms of the policies.  

With regard to Setanta premiums and claims, the position on each policy is for the Liquidator to decide in due course.  The Liquidator has a legal obligation to treat all claims equally. This applies to all claims submitted  both before and after Setanta was formally placed into liquidation. The Insurance Compensation Fund (ICF) will also treat equally claims submitted but not paid before and after Setanta was formally placed into liquidation. My officials and the Central Bank will remain in close contact with the Liquidator and I have asked that public statements are provided to clarify matters for policyholders and claimants.

The Motor Insurance Bureau of Ireland (MIBI) is a non-profit-making organisation registered in Ireland.  All insurance companies underwriting motor insurance in this country must, by law, be members of MIBI and contribute to the funding of claims in proportion to their market share.   The principal role of MIBI is to compensate innocent victims of accidents caused by uninsured and unidentified vehicles. This is regulated under the terms of an Agreement between the MIBI and the Minister for Transport, Tourism and Sport.  MIBI has sought legal certainty on its role in relation to Setanta policyholders.  I understand that the MIBI Board met on 11 July 2014 to consider this legal advice . We expect to receive a considered response from MIBI in the coming days in relation to their position. If, for legal reasons, MIBI is not in a position to accept a claim, these third party claims will be eligible to proceed for consideration by the High Court for compensation from the ICF.

The legislation dealing with the ICF provides that claims by bodies corporate or unincoorporated bodies are not covered by the Fund except where there is a liability to or by an individual.  Furthermore, all ICF payments are subject to a limit of 65% of the total amount of the claim or €825,000, whichever is the lesser.   Refund of premiums is not allowable from the ICF.

The payment of costs which have already been ruled by a Court and are due to be paid by Setanta are a debt of Setanta which may be claimed from the liquidation.  In addition, under Section 3.1 of the Insurance Act 1964 (as amended) the costs and expenses which have been necessarily and reasonably incurred by a claimant in endeavouring to secure payment of a claim are eligible for compensation from the ICF.

Setanta claimants should continue to contact the Liquidator in relation to their claims until otherwise advised. The Liquidator is continuing his work on providing clarity to the extent he can on the full extent of claims and the likely dividend from the liquidation.  Once further information becomes available, and the outcome of MIBI's consideration of its legal advice has been taken into account, the Department will further examine how the ICF can assist those policyholders affected by the Setanta closure.