Michael McCarthy (Cork South West, Labour) | Oireachtas source

I wish to set out the position with regard to the closure of Setanta Insurance. The weakness in the regulatory system has allowed this company to avail of EU rules essentially allowing it be regulated in another EU jurisdiction while operating solely in this jurisdiction, with 75,000 policyholders, most of which are small and medium enterprises. We are all well aware of the difficulty these small and medium enterprises are experiencing without this kind of disaster being visited upon them. While this issue has been raised by way of parliamentary questions and Topical Issues, I want clarify the current legal position in regard to the policies, what assistance is available to policyholders and, critically, the role of the Financial Regulator, an issue which has been a fairly hot chestnut in this country in recent years.

Setanta claimants and customers do not know what is happening one month after the Malta-registered insurer went into liquidation. Questions about who knew what and when in regard to Setanta Insurance are beginning to mount up. It has now emerged that the Central Bank had been aware of difficulties in the company since November of last year. Setanta stated in January of this year that it would stop taking new business and cease existing policies but, in the meantime, the bombshell was that it published on its website last month the news that its operation was to be liquidated and claims would not be met. I want to know what the Central Bank knew last November and what it did - or, critically, what it did not do - about it. There is also discussion between the Central Bank and the Malta Financial Services Authority, and I want to know the exact detail of that. Was the Minister or the Department aware of it and, if so, what action did they take in regard to it?

Protecting the consumer means more than knowing there are problems and then doing nothing about it. Protecting the consumer is exactly that. There has been a long litany of disasters in this country in recent years in regard to people who knew things and did not do anything about them or, further, regulatory authorities that were not doing what they were supposed to be doing. We learned yesterday there are currently more than 600 firms licensed to carry out insurance business in this country that are not regulated for prudential purposes by the Central Bank. This poses an extremely serious risk to Irish consumers and there are no guarantees that what happened in regard to Setanta Insurance will not happen in regard to other businesses or other people availing of such services. The matter requires further analysis. The lessons we are currently learning in regard to Setanta Insurance must inform how we are able to cope with future issues that will invariably arise.

I understand the Minister for Finance, Deputy Noonan, has given a commitment that the Department of Finance and the Central Bank will review the circumstances around Setanta Insurance and will report on what lessons can be learned and how the regulatory framework can be strengthened. As we speak, however, there are thousands of people who have been, in effect, disenfranchised by what has happened. It is not good enough that another EU member state would host a company which would come in here and do precisely what it has done to people trading in this country.

The fact so many small businesses are still here in 2014 is a great tribute to the way in which they have been able to weather economic catastrophe in recent years. To think that, just when there is almost light at the end of the tunnel and they can see the horizon for the first time in a hell of a long time, they would have to deal with such a calamity is unacceptable. In particular, the role of the Central Bank needs to be established without doubt. If people in the Central Bank were asleep on the job or did not do their job, the consequences of that are now going to be felt by honest-to-God unfortunates around the country who are left in limbo by this debacle.

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