Pat Breen (Clare, Fine Gael) | Oireachtas source

I thank the Deputy for raising this very important issue. My colleague, the Minister for Finance, asked me to take this Topical Issue debate for him because he has another previously organised engagement.

As the Deputy has rightly pointed out, on 28 November the Central Bank announced it had been informed that Qudos Insurance A/S had entered into solvent liquidation. Qudos is authorised and regulated by the Danish Financial Supervisory Authority, FSA, and therefore the Central Bank has no role in this decision. Qudos operated in Ireland on a freedom of services basis, and its products were sold through Patrona Underwriting Limited.

On 4 December, Qudos published further information stating it was no longer paying insurance claims. In light of the uncertainly around the payment of claims, the Central Bank then issued a statement strongly recommending that affected customers contact their insurance brokers to arrange alternative insurance cover. It is understood that at the end of November 2018, there were 51,012 policyholders with Qudos in Ireland. That is comprised of 37,948 van insurance policies, 10,940 household insurance policies and 1,366 private car insurance policies. I will provide the Deputy with the figures. There are also smaller numbers of fleet, haulage and non-standard insurance policies totalling 758. Patrona has issued a statement saying that policies remain valid and in force until their natural expiry dates. However, given the current Qudos position and in line with Central Bank recommendations, Patrona has provided brokers with options to replace all insurance cover with other providers at no extra cost to consumers. We understand that the vast majority of policyholders have now been transferred to new providers.

The Central Bank has informed the Department of Finance that, as of 14 December 2018, there were 1,544 open Qudos claims. This cohort is made up of 155 household claims and 1,389 private car claims. The Central Bank understands the Danish liquidators are continuing their review of the company, with a view to determining its underlying financial position. Once this exercise is concluded, they will be in a better position to determine whether the company is solvent or insolvent. It is only then that it can be determined that the company has failed, that is, it is unable to meet its claims obligations. The matter is fluid as information is being frequently updated. We were trying to get an update for the Deputy this evening. Consequently, it is expected that more information regarding this matter should he available later this week. When we get this information, we will convey it to the Deputy.

Last week Department of Finance officials were in contact with Denmark's Ministry of Finance. The ministry advised them on the basis of information received from the Danish FSA that, as the company is in solvent liquidation, it believes that claims will be met. As the Deputy also rightly pointed out, the Ministry also indicated that if Qudos is ultimately placed into bankruptcy before 1 January 2019, the Danish insurance guarantee scheme will be liable to meet these claims. However, due to a legislative change in May 2018, if bankruptcy is declared on or after 1 January 2019, the Danish insurance guarantee scheme will not be in a position to pay claimants located outside Denmark. This is the eventuality the Deputy is worried about. However, in such a situation, Irish claimants may instead be eligible for cover from the Irish insurance compensation fund subject to its terms and conditions and the particular circumstances of the case.

I understand Department of Finance officials were also in contact with the UK Treasury and the European Commission to set out the impact and importance of this issue for Ireland and to understand what, if any, actions they were planning to take. UK customers have also been impacted by the failure of Qudos. The Minister of State, Deputy D'Arcy, has met Insurance Ireland whose representatives outlined their serious concerns about the additional cost that Qudos could place on the Irish insurance sector if it is liquidated on or after 1 January 2019. Officials continue to liaise with the Central Bank which advises that it is in very frequent contact with its Danish counterparts and the supervisory authorities of other affected member states though the collaboration platform for Qudos established by the European Insurance and Occupational Pensions Authority, EIOPA. The Deputy can rest assured that, throughout the week, intensive efforts will continue through the appropriate channels to seek an early decision from the Danish authorities to provide certainty for all affected parties.

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