Michael McGrath (Cork South Central, Fianna Fail)
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221. To ask the Minister for Finance the progress that has been made in respect of the liquidation of a company (details supplied); if those caught up in outstanding claims are facing any losses; the role of the insurance compensation fund; the role of the Motor Insurance Bureau of Ireland; the current estimate of the number and value of outstanding claims and the shortfall; and if he will make a statement on the matter. [10001/17]

Michael Noonan (Limerick City, Fine Gael)
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Setanta was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. Setanta is a Maltese incorporated company and therefore, the Setanta liquidation is being carried out under Maltese law.  The most recent figures received by the Department of Finance from the Liquidator for Setanta is that the number of open claims is 1,658.

Progress in the liquidation has been delayed due to court proceedings in the case of Law Society of Ireland v the Motor Insurers' Bureau of Ireland (MIBI).  The current position is that we are awaiting the outcome of MIBI's appeal to the High Court ruling, which was heard before the Supreme Court in October 2016.  No date has been specified for the judgment.

In relation to whether any outstanding claims are facing losses, it should be noted that prior to this court case, we would have expected the Insurance Compensation Fund to have met the third party claims up to a limit of 65%  and a ceiling of €825,000 per claimant.  In such a situation the third party claimants would have suffered a loss due to the cap. However if the High Court ruling is upheld then the MIBI will compensate third parties fully up to a limit of €1,220,000 per claim for property, regardless of the number of claimants, while there will be no cap on payments for personal injury claims.  

As the Deputy is aware, a small number of additional claims are not affected by the court proceedings and are being processed by the Office of the Accountant of the Courts of Justice due to the fact that they are 1st party claims and come unambiguously within the remit of the  Insurance Compensation Fund (ICF). In relation to these policyholders the cap of 65% applies and in total €608,085  has been made to date to such Setanta policyholders.

The position in relation to 3rd party motor insurance claims is that they are unlikely to be processed until after the outcome of the Supreme Court appeal.

The Liquidator for Setanta has informed me that:

- Claims provision required stands at between €87.7 million and €95.2 million.

- Setanta policies were cancelled in May 2014. The 2 years allowable under the statute of limitation to lodge claims has expired so the claims figures will not increase further.

- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal.

- The Liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims.

I expect to be able to provide a more accurate update after the legal proceedings are concluded.

Michael McGrath (Cork South Central, Fianna Fail)
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222. To ask the Minister for Finance the motor insurance compensation framework in place at present in the event of a motor insurance firm being liquidated; and if he will make a statement on the matter. [10002/17]

Michael Noonan (Limerick City, Fine Gael)
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Insurance guarantee schemes provide last-resort protection to policyholders and beneficiaries when insurers are unable to fulfil their contractual commitments.  They protect against the risk that claims will not be met in the event of a failure of an insurance undertaking.

The main insurance guarantee scheme in Ireland is the Insurance Compensation Fund (ICF) which covers the liabilities of insurance policyholders in the event of a failure of a non-life insurance undertaking (other than a health insurer).

The ICF is primarily designed to facilitate payments to policyholders in relation to risks in the State where an Irish authorised non-life insurer or a non-life insurer authorised in another EU/EEA Member State which is providing insurance in respect of risks within the State, goes into liquidation and the approval of the High Court has been obtained for such payments.

With the approval of the High Court, money may be paid out of the Fund to the liquidator of an insolvent insurer to meet claims (other than the refund of a premium) due to a natural person under a policy issued by the insurer, up to a limit of 65% of such claims and a ceiling of €825,000 per claimant.  Payments from the Fund are made only where it is determined by the High Court that it is unlikely that the claim can be met otherwise than from the Fund.

The Deputy will also be aware that the High Court decision in September 2015, ruled the MIBI liable for third party motor insurance claims in the event of the liquidation of an insurance company.  This decision was appealed by the MIBI, however in March 2016, the Court of Appeal dismissed the appeal.  Subsequently, in April 2016, the Supreme Court made an order allowing an appeal to that Court.  This appeal was heard by the Supreme Court in October 2016 and judgement was reserved.  No date has been specified for judgement. 

MIBI's main purpose is to pay financial compensation to innocent victims of uninsured and/or untraced vehicles.  The MIBI compensates for death or injury to a person, or damage to property which is required to be covered by an approved policy of insurance under section 56 of the Road Traffic Act 1961. The amounts payable in respect of claims under the Road Traffic Act is 100% to a current limit of €1,220,000 per claim for property, regardless of the number of claimants.  The limit does not apply in the case of personal injury.

Finally, the Review of the Framework for Motor Insurance Compensation in Ireland, which was published in June 2016, sets out the Joint Working Group's assessment of the current framework and makes recommendations to provide certainty regarding the compensation framework in Ireland. Its key recommendations are:

- The level of cover from the ICF for third party motor insurance claims be increased from 65% to 100% in line with that currently provided by the Motor Insurers' Bureau of Ireland.

- The increased coverage of the ICF be funded by a direct contribution to the ICF from the motor insurance industry. While the Review   indicated that this would come  via the Motor Insurers' Bureau of Ireland, to the value of 35% of the third party motor insurance claims, further discussions are ongoing with industry about options for alternative funding arrangements which would provide greater  predictability about their financial exposure.

Michael McGrath (Cork South Central, Fianna Fail)
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223. To ask the Minister for Finance if he will provide an update on the impact of the collapse of a company (details supplied); if those caught up in outstanding claims are facing any losses; the role of the insurance compensation fund; the role of the Motor Insurance Bureau of Ireland; the current estimate of the number and value of outstanding claims and the shortfall; and if he will make a statement on the matter. [10003/17]

Michael Noonan (Limerick City, Fine Gael)
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Enterprise Insurance Company plc (Enterprise) is a Gibraltar incorporated company and, therefore, the Enterprise liquidation is being carried out under the laws of Gibraltar.  The situation around the Enterprise liquidation is an evolving one.  The position as it currently stands is as set out below.

A Provisional Liquidator was appointed to Enterprise on 25 July 2016. A report of the Provisional Liquidator was considered by the Supreme Court of Gibraltar on 26 October 2016, after which the Supreme Court agreed with the appointment of a liquidator to Enterprise. Upon appointment, the Liquidator disclaimed all Enterprise motor policies resulting in all motor policies written by Enterprise ceasing to be effective from midnight 26 October 2016.  

According to the Enterprise website, the Liquidator is currently confirming arrangements for the management of claims as well as establishing the process by which claims may be submitted. Directions for the submission of claims will be detailed on the website of for Enterprise (www.eigplc.com/) as soon as they are available. Persons who have a query or a claim should contact the Liquidator and his team on telephone number 00 350 200 50150 or info@eigplc.com.

My officials are liaising with the liquidator to find out the number and value of outstanding claims. At this stage, this information has not been made available.

In relation to refunds for outstanding cover on policies, Enterprise's agent in Ireland, Wrightway Underwriting Ltd, has advised the Central Bank that it has informed brokers to make an ex-gratia payment to affected policyholders. This payment will be equal to the value of the premium from 26 October 2016 until the end of the current policy contract . Policyholders are advised by the Central Bank to discuss any such refunds with their broker.

In relation to the role of the Insurance Compensation Fund (ICF) the Deputy should note that it provides for payments to meet the liabilities of insolvent insurers in certain cases where it is unlikely that claims can be met otherwise than from the ICF. Management and administration of the ICF is under the control of the President of the High Court acting through the Office of the Accountant of the Courts of Justice. Under the Insurance Act 1964, in a liquidation all ICF payments are subject to a limit of 65% of the amount due or €825,000, whichever is the lesser. In addition, claims by bodies corporate or incorporated bodies are not covered by the ICF, except where there is a liability to or by an individual.

In relation to the role of the Motor Insurance Bureau of Ireland (MIBI), the High Court issued a decision in the Law Society of Ireland v the MIBI case to the effect that the MIBI's liability under the 2009 Agreement extended to situations of insurer insolvency (subject to each individual claim being deemed eligible). This decision was then appealed by the MIBI, however in March 2016, the Court of Appeal dismissed the appeal.  Subsequently, in April 2016, the Supreme Court made an order allowing an appeal to that Court.  This appeal was heard by the Supreme Court in October 2016 and judgement was reserved.  No date has been specified for delivery of the judgment.  If the High Court ruling is upheld then the MIBI will be liable to compensate third parties up to a limit of €1,220,000 per claim for property, regardless of the number of claimants, while there will be no cap on payments for personal injury claims.