Shane Ross (Dublin South, Independent)
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169. To ask the Minister for Finance his plans to protect policy holders with the now collapsed Setanta Insurance; the way he will ensure the smooth transition for all the innocent policy holders to another insurer or assist in brokering the deal for another insurer to take over; and if he will make a statement on the matter. [20952/14]

Willie Penrose (Longford-Westmeath, Labour)
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194. To ask the Minister for Finance if in the context of the situation that has arisen for policy holders here as a result of the recent collapse of Setanta Insurance, if the compensation fund is being made available to these policy holders, who have been left out of pocket, and have to secure alternative policies of indemnity so as to fulfil their legal obligations; and if he will make a statement on the matter. [21188/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 169 and 194 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.  The Central Bank is in contact with the MFSA in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims.

On 16 April, 2014, 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. Setanta was formally placed into liquidation by the MFSA following a meeting of the creditors which took place on the 30 April, 2014 where a liquidator, Mr Paul Mercieca, was appointed.

Officials from my Department together with officials from the Central Bank met with the Liquidator and his representatives in Ireland on 7 May 2014. At that meeting, the Liquidator confirmed that Setanta will not be in a position to pay the full amount of claims. It is also unlikely that a pro-rata portion of premiums will be refunded upon completion of the Setanta liquidation.

On Friday the 9^thof May the Liquidator placed notices in national newspapers which advised policyholders that all Setanta policies of insurance will be cancelled by way of 7 days' notice or 10 days' notice to policyholders in accordance with their policy documents. The notice further urged Setanta policyholders to make alternative motor insurance arrangements, as soon as possible, as previously advised by the Central Bank. The position on each policy is for the Liquidator to decide in due course. 

The Motor Insurance Bureau of Ireland (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. If, for legal reasons, MIBI is not in a position to accept a claim, these third party claims will be eligible to proceed for consideration by the High Court for compensation from the Insurance Compensation Fund (ICF).

Claims on personal insurance policies will be payable from the ICF.  All ICF payments are subject to the limit of 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 either commercial and personal insurance policies is not covered by the ICF or MIBI.

The Liquidator advised that arrangements are in hand for policyholders to obtain their "no claims bonus" certificates from Setanta. Insurance Ireland have informed me that these certificates will be honoured by other insurers. 

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.  I understand that Insurance Ireland 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 .

The provision of motor insurance cover remains 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.

Until otherwise advised those policyholders which have been affected by the collapse of Setanta should continue to contact Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300or on .

Pearse Doherty (Donegal South West, Sinn Fein)
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170. To ask the Minister for Finance the reason if the Financial Regulator was aware of issues at Setanta Insurance in November 2013 customers were not informed of these issues. [20966/14]

Pearse Doherty (Donegal South West, Sinn Fein)
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171. To ask the Minister for Finance the reason, if he was aware of issues at Setanta Insurance in January, customers were not informed of these issues. [20967/14]

Pearse Doherty (Donegal South West, Sinn Fein)
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172. To ask the Minister for Finance when Setanta Insurance was obliged to stop the sale and renewal of insurance; if his attention has been drawn to the fact that it continued to do so until at least March; and if he will make a statement on the matter. [20968/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 170 to 172, inclusive, together.

Setanta Insurance Company Limited (Setanta) is a Maltese incorporated company subject to prudential supervision in Malta by the Malta Financial Services Authority (MFSA). Its financial position is not supervised by the Central Bank of Ireland and the Central Bank has no role in that regard. The Central Bank have informed me that they have been in discussions with the MFSA in relation to Setanta since November 2013 when the Central Bank identified issues during a consumer protection themed inspection and immediately referred the matter to the MFSA for further investigation. The Central Bank have also informed me that there was regular contact in the following months which led to the announcement in January, 2014 that the firm would cease writing new business and issuing further renewals.

The Central Bank wrote on the 16th January 2014 to advise my Department of their concerns with Setanta's solvency margin and I was subsequently informed of this.  A widely reported press release was issued by Setanta Insurance on January 27th 2014 which stated that the insurer had resolved to cease carrying on the business of insurance, including further renewals of existing business, with effect from close of business of 24 January 2014. Setanta then appointed Heritage Insurance Management (Malta) Limited to undertake the run-off process and the insurer advised the MFSA accordingly.   The details and operation of this run off process is a prudential matter overseen by the home regulator, the MFSA.   

I am advised that contact continued between the Central Bank and the MFSA and, on 11 April 2014, the MFSA advised the Central Bank that the directors of Setanta were considering the potential liquidation of the company.  There was ongoing contact over the following days.  Setanta announced that the shareholders had recommended the appointment of a liquidator on 16 April 2014 subject to approval of the MFSA.   On April 16th I was advised that the shareholders of Setanta had resolved to wind up the company and a liquidator had been provisionally appointed. The Central Bank is in ongoing contact with the Malta Financial Services Authority (MFSA) in relation to Setanta Insurance Company Limited.

The Central Bank has also been engaging with the brokers who sold the policies to ensure they assist policyholders and keep them informed. The Central Bank has written to all brokers to instruct them to write to all policyholders that hold a current Setanta motor insurance policy and inform them of the urgency of making alternative motor insurance arrangements.  The Central Bank as well as the Department of Finance have also liaised with the relevant industry representative bodies.

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. The European Commission has also indicated that it will review whether any issues raised relating to the regulatory framework require action.