Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I thank Senator O’Donnell for raising this matter. It is an opportunity to put on the record of the House where things stand in this regard. He is aware that a Supreme Court ruling in May of last year overturned the Court of Appeal and High Court rulings that the MIBI was liable for such claims. The Supreme Court clarified that the ICF is liable for third-party claims, subject to a limit of whichever is the lesser of 65% or €825,000. It is expected that the balance due to claimants, 35%, will be paid from the proceeds of the distribution of assets on completion of the liquidation process. Following a request from the Minister, Deputy Donohoe, for an actuarial review, this is estimated to be in the region of 22% of the value of claims, thus leaving a shortfall of approximately 13%. However, the liquidator has made it clear that no payments can be made from the assets of Setanta to third-party claimants until the final claim is settled. That is a very important point. This creates further uncertainty for such claimants.

The Setanta insolvency and the subsequent Supreme Court ruling have highlighted an inequity between awards for third-party claimants from the MlBl in respect of uninsured or unidentified drivers, whereby personal injuries are compensated in full, compared with compensation from the ICF in the event of an insolvency. That is particularly unfair. The Senator is aware that the Insurance (Amendment) Bill 2017 is soon to come before the Houses and I will appear before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach for pre-legislative scrutiny in respect of it next week. As I said, the Minister for Finance requested an actuarial review of the situation. It was also necessary to obtain legal advice as any Government intervention to compensate third-party claimants beyond the 65% limit could result in the Government having a lower status in the creditor hierarchy and thus significantly reduce the amount it could recoup from the liquidator. That was a very major concern at the time. That provides the backdrop to the Minister for Finance’s intervention on Tuesday.

The next step is to give consideration as to whether there is a competition and state-aid issue associated with the final implementation of this decision. That is a very live concern. The Department of Finance is currently working with the Office of the Attorney General on the issue. The House may rest assured that the Government is prioritising this matter without delay and if a legislative approach is required, it will approve the necessary provision as soon as possible. This will most likely be addressed through the Insurance (Amendment) Bill. I hope the Bill will be passed in 2018.

It is important to remember that, in the absence of a settlement by a third-party claimant, no payment can be made by the ICF. This is a matter over which the Minister for Finance has no control. However, the Deputy can rest assured that once the detailed arrangements for facilitating the full compensation have been agreed, the Minister will give an indication of the likely timeline for payment, including the payment of the additional 35% to those who have already been paid 65%.