Michael McGrath (Cork South Central, Fianna Fail)
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79. To ask the Minister for Finance if he is satisfied with the regulatory model of the insurance sector in view of the collapse of two firms in the sector within a short period of time; and if he will make a statement on the matter. [19150/14]

Pearse Doherty (Donegal South West, Sinn Fein)
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102. To ask the Minister for Finance if he will review the regulatory environment to ensure another insurance company does not collapse as happened with Setanta Insurance leaving 75,000 policy holders without a policy. [19419/14]

Noel Grealish (Galway West, Independent)
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116. To ask the Minister for Finance if he will clarify the status of Setanta Insurance Ltd in regard to its regulation both by the Maltese Financial Services Authority for prudential issues and the Central Bank of Ireland for the conduct of business; if EU Freedom of Services legislation and regulatory control is deficient in allowing a company to be registered in a country where that company does not transact any business, while trading in another country; and if he will make a statement on the matter. [19646/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 79, 102 and 116 together.

Under EU law which governs non-life insurance, an insurer is required to inform the regulator in its home Member State (its home regulator) that it intends to pursue business in another Member State. The home regulator must then provide the host regulator with a certificate attesting that the insurer covers the EU Solvency Capital Requirement, as well as the nature of the business which the insurer intends to undertake. The insurer may start to pursue business from the date that the certificate is communicated to the host regulator, in this case the Central Bank of Ireland. 

Setanta Insurance Company Limited ("Setanta") is a Maltese incorporated company which was both authorised and prudentially supervised by the Malta Financial Services Authority (MFSA). While its financial position is not supervised by the Central Bank of Ireland as the Central Bank has no role in that regard,  the firm is supervised by the Central Bank for conduct of business rules, i.e. consumer protection obligations.  I understand that the Central Bank has been in ongoing contact with the MFSA in relation to Setanta in recent times.

Setanta was regulated at EU regulatory level in accordance with a directive known as Solvency I which currently places requirements on the amount of regulatory capital European insurance companies must hold against unforeseen events. I understand that Setanta met its EU regulatory obligations and under EU law is therefore entitled to trade across EU borders.

Following negotiations that were completed at European level in November, 2013, a new regime known as Solvency II will commence on 1 January 2016, which will further strengthen the EU regulatory framework. The Solvency II EU Directive sets out new, stronger EU-wide requirements on capital adequacy and risk management for insurers with the key aim of increasing policyholder protection.  The new regime will also ensure greater cooperation between supervisors.

The European Commission has also indicated that it will review  whether any issues raised relating to the regulatory framework require action.  My Department and the Central Bank will be reviewing the circumstances relating to Setanta and will be reporting to me on what lessons can be learnt and how the framework can be strengthened.