Éamon Ó Cuív (Galway West, Fianna Fail)
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36. To ask the Minister for Finance the arrangements in place, in view of recent developments in the insurance industry, to ensure that vehicle insurance paid for the full year to companies that run into financial difficulties, will remain valid and in force and that the insurance cover will not be affected; and if he will make a statement on the matter. [19773/14]

Éamon Ó Cuív (Galway West, Fianna Fail)
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37. To ask the Minister for Finance the arrangements he has put in place to ensure the continued insurance cover of persons who purchased insurance with a company (details supplied) in view of the financial difficulties that have arisen for this company; and if he will make a statement on the matter. [19810/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 36 and 37 together.

The provision of motor insurance cover is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are accepting and the making of adequate provisioning to meet these risks. In my role as the Minister for Finance I have responsibility for the development of the legal framework governing financial regulation.

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.

On 16 April, 2014, Setanta determined that the company was insolvent and Setanta was formally placed into liquidation by the MFSA on 30 April, 2014. This means that Setanta does not have sufficient funds to be able to honour its full obligations towards claimants, policyholders and other creditors.  While the position on each policy is for the liquidator to decide in due course, policyholders will be given cancellation notification 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 Central Bank is in ongoing contact with the Malta Financial Services Authority in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims. The Central Bank has been engaging with over 230 brokers who were offering policies from Setanta Insurance to consumers to require them to immediately contact any Setanta policyholder and inform them of the urgency to make alternative motor insurance arrangements. 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).  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. Until otherwise advised those policyholders 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 .

I understand that Insurance Ireland, who have also advised Setanta policyholders to arrange new motor insurance immediately, is also making information available to those who have queries, complaints or difficulties in relation to this matter through their service at (01) 676 1914 or by email at . In addition, the Insurance Ireland 'Declined Cases Agreement' was available to policyholders of Setanta.  The current Declined Cases Agreement was drawn up in 1981 and is adhered to by all motor insurers in Ireland. I am informed that under the agreement, the insurance market will not refuse to provide insurance to an individual seeking insurance, if he/she has approached at least three insurers and has not been able to obtain cover from them.