Written answers
Wednesday, 30 April 2014
Department of Finance
Insurance Industry
Michael McGrath (Cork South Central, Fianna Fail)
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78. To ask the Minister for Finance if compensation is available to customers of a company (details supplied) who have paid motor insurance premia but who are now effectively without cover; and if he will make a statement on the matter. [19149/14]
Pearse Doherty (Donegal South West, Sinn Fein)
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99. To ask the Minister for Finance the options available to customers affected by the collapse of the Setanta Insurance company; and if he will make a statement on the matter. [19416/14]
Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 78 and 99 together.
On Wednesday 16thApril, 2014, Setanta Insurance Company Ltd ("Setanta") determined that the company was insolvent. This means that Setanta does not have sufficient funds to be able to honour its full obligations towards claimants, policyholders and other creditors. It is expected that Setanta will be formally placed into liquidation by the Malta Financial Services Authority in the coming days. Policyholders can expect to be given two months cancellation notification (in accordance with the Central Bank of Ireland's Consumer Protection Code 2012) during which period cover will remain in force. While policies will remain valid until the required notice period has been served, it is important to be clear that the amounts due under any claims may not be fully recoverable in all circumstances. In this light, it is important to note that the Central Bank of Ireland has advised all Setanta policyholders to arrange for alternative cover without delay.
The Motor Insurance Bureau of Ireland ("MIBI") have indicated that they intend to accept all third party claims in connection to Setanta policies. MIBI is a non-profit-making organisation which was established by Agreement between the Government and those companies underwriting motor insurance in Ireland. The principal role of MIBI is to compensate innocent victims of accidents caused by uninsured and unidentified vehicles.
First party claims on personal insurance policies will be payable from the Insurance Compensation Fund (ICF) once Setanta is formally placed into liquidation. Claimants will be eligible for 65% of the amount due or €825,000, whichever is the lesser. Under Section 3.6 of the Insurance Amendment Act 1964 (as amended) first party claims by a body corporate or unincorporated body are not covered by the ICF.
The refund of premiums for commercial and personal insurance policies is not covered by the ICF or MIBI. A portion of the premium refunds may, however, be available upon completion of the Setanta liquidation.
Until otherwise advised those customers which have been affected by the collapse should continue to contact to Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300) or on support@setantainsurance.com.
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