Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I welcome this debate and thank Deputy Michael McGrath for bringing forward the motion and allowing us to discuss it. I will be sharing my time with my colleagues, some of whom have yet to come into the Chamber. I understand the Ceann Comhairle has the list of names. This debate focuses attention on the thousands of customers who have been left in legal limbo after the collapse of Setanta Insurance.

I know some of them personally. Some of them are my friends. Some of them want to start their own businesses but have to wait for the settlement to which they are entitled and are eagerly awaiting the court's decision. They should never have been in this limbo in the first place. It is clear they are innocent victims of a bigger battle and we need to take them out of the battle, which is why Sinn Féin will support the motion. This is a farce which has been rumbling on for far too long and I hope the Supreme Court will soon make its decision. In the meantime, the Government has put forward a proposal to deal with cases such as this, but they are cases which will happen in future.

This is in large part a mess of the Government's own creation. Not for the first time has the Attorney General provided what two courts have since found to be the wrong answer to the question asked. The Attorney General's advice has been wrong in this case and this is worth noting as another committee is discussing the issue of water charges. The Motor Insurers Bureau of Ireland, MIBI, has appealed twice and at no point was there anything stopping it from paying out these claims without prejudice. It initially accepted it was liable but then backtracked on legal advice, including advice from the Attorney General. Instead of challenging this, the Government rolled over and accepted it. This was back in 2015. I believe that in all likelihood when the Supreme Court makes its decision we will be back in the same position we were when the Minister, Deputy Noonan, told me on 30 April 2015 that MIBI would pay out and it would be the body responsible for making good the claims. As things stand, the High Court and the Court of Appeal have stated they agree with the Law Society that the MIBI is liable. This is the interpretation of the law as it currently stands, and it is law as it stands until the Supreme Court rules one way or the other.

In reality, the motion is asking us to make an exception. I welcome the focus on this issue, which is why I will support the motion. The motion asks that the Government ensures the Insurance Compensation Fund, ICF, pays out. The legislation is quite clear it is the President of the High Court, upon application, who will make this decision, but nonetheless there should have been a remedy before now. For many years we have argued the Insurance Compensation Fund would have been the remedy. While the MIBI and the Insurance Compensation Fund can argue the toss, the fact is that ultimately it is the consumer who will pay for Setanta, one way or the other. The MIBI and the Insurance Compensation Fund are ultimately funded by the industry or the consumer but, at the end of the day, whether it is through increased premiums or a direct levy it will be the consumer who pays. The advantage of the Insurance Compensation Fund paying the liquidator is it can stretch the payments over a long period of time and we can see this with the Quinn Direct bill of €1.1 billion. I note the Fianna Fáil motion speaks about regulatory failures and taking action against regulatory failures. The €1.1 billion which must be paid by insurance consumers for the next 20 years happened on Fianna Fáil's watch. This is why we were labelled the wild west. It was not with regard to the banks but insurance the quote was attributed to this country and it is disgraceful that insurance consumers will continue to have to pay the bill for many years to come.

The motion does not deal with the fact the Insurance Compensation Fund is limited to paying out 65% of a claim or up to €825,000, whichever is lower. There are people with claims against Setanta Insurance which run to multiples of the upper limit because they are in serious life-limiting circumstances as a result of an accident. Full compensation should be paid out. If people are due €100,000 the payment should not be €65,000. We are very clear and for many years we have argued the Insurance Compensation Fund legislation should be altered to allow for 100% of the claims to be paid out in the case of Setanta Insurance. The motion before us does not deal with this issue. It is the core issue on which we should focus because if the Supreme Court overturns the High Court and the Court of Appeal and decides it is the Insurance Compensation Fund which must pay out, let us remember that claimants will receive only 65% of what they are due. In my view this is wrong. While the Department proposes to abolish the cap, it would still apply in cases such as Setanta where a company is in liquidation and insolvent.

I wish to discuss some of the myths in the motion. We reject the notion implicit in the Fianna Fáil motion that this contributes in any way significantly to increases in the cost of insurance. Even if the industry had to pay out the entire €19 million bill tomorrow, it would only be a drop in the ocean of the increases introduced in recent years. This is a myth peddled by the industry. When I met representatives from the industry privately and when they came before the committee it was at the top of their agenda, but it does not stand up to scrutiny and no report commissioned by the Oireachtas committee or the Government stands over this claim. Without doubt, the industry needs clarity on the legal situation, but to present this as a means of tackling the rip-off of recent years is false.

There is also an insinuation it was fully down to lax foreign regulators but this is not the entire story. Setanta Insurance was an Irish company with an Irish director and Irish shareholders right up to the end. The Maltese certainly should have done a better job, but the Irish Central Bank allowed the company to continue to sell insurance for a number of months after it knew of issues. I know this through freedom of information requests. It is not unprecedented that an Irish insurer would behave recklessly and go bust. We have a terrible track record in this country and €1.1 billion is the cost.

I ask Fianna Fáil to let us know whether it no longer supports the passporting of financial firms throughout the EU, because this would be a major shift in policy by the party and it is not clear from the motion. My big concern is nothing will happen. The Government will abstain and the ICF will not pay out. It is good we are drawing attention to it, but this should have been sorted out several years ago. We should have amended the legislation and allowed for the ICF to pay out. Doing it in the mouth of a Supreme Court ruling is not the time to do it, but it is a welcome focus on the issue.

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