Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 80 to 82, inclusive, together.

The Supreme Court in delivering its judgment on 25 May 2017 overturned the previous decisions of the High Court and the Court of Appeal that the Motor Insurers’ Bureau of Ireland (MIBI) is liable in respect of third party motor insurance claims made against the policyholders of Setanta Insurance.  The consequence of this is that the Insurance Compensation Fund (ICF) has been deemed responsible for the payment of such third party claims.

Setanta Insurance was placed into liquidation by the Malta Financial Services Authority in April 2014 and this liquidation is being carried out under Maltese law.  The Liquidator has informed the Department that, as of 30 April 2017, the number of open claims was 1,639.  It is now possible to begin the process of making payments of up to 65% (or €825,000, whichever is the lesser) due to relevant third party claimants from the ICF. 

It is expected that a proportion of the balance of claims will be met from the proceeds of the distribution of Setanta’s assets on completion of the liquidation process. However, it is not possible to say definitively at this stage what proportion of the claims this will amount to, but current indications are that this is unlikely to be sufficient to cover all of the 35% gap.

In 2014, a preliminary assessment was carried out by Towers Watson who indicated that the Liquidator would not be in a position to meet more than 30% of claims out of the assets of the liquidation. The Liquidator has informed the Department that as the Supreme Court has now made its judgement, it will be necessary for a new report to be commissioned to provide updated figures.  This is expected to commence shortly.

The extent of the shortfall (i.e. the difference between the full amount due and the combined total of the ICF payment plus the Setanta distribution) is unlikely to become fully clear until the liquidator has determined the remaining monies in Setanta that he has to distribute to policyholders.

Finally, in relation to the issue as to when payments can be expected to commence, it should be noted that Department of Finance officials have had discussions with the Office of the Accountant of the Courts of Justice and the State Claims Agency and they have indicated that they have plans in place to deal with this issue.  Our understanding is that both agencies are working with the Liquidator to plan out the process of validation and presentation of claims. Once the liquidator has the claims ready for examination, the State Claims Agency will step in to commence the validation process. The State Claims Agency has assured the Department that it will act swiftly so that there will be no unnecessary delay caused by this validation process. I hope to have greater clarity on the timescale shortly.

As the Deputy is aware the forthcoming legislation based on the recommendations of the Review of the Framework for Motor Insurance Compensation in Ireland will amend the relevant Insurance Acts to ensure 100% of third party motor claims will be covered in future by the ICF.