Willie O'Dea (Limerick City, Fianna Fail)
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59. To ask the Minister for Finance his plans for persons who are granted damages against defendants who are insured by a company (details supplied) in view of the recent Supreme Court decision that they will be paid from the insurance compensation fund in cases in which the amount recoverable is capped at 65%; and if he will make a statement on the matter. [39978/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Setanta Insurance was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. As it was a Maltese incorporated company, the  liquidation is being carried out under Maltese law.

The Supreme Court delivered its judgment on 25 May 2017 and 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.

As the judgment has been delivered, the process of making payments in accordance with the provisions of the Insurance Act, 1964, as amended, has commenced. Payments can only be made out of the ICF, with the approval of the High Court and only if it appears to the High Court that it is unlikely that the claim can be met otherwise than from the ICF. If satisfied, the High Court can order payments out of the ICF up to 65% (or €825,000, whichever is the lesser) due to relevant claimants.

The Liquidator has informed the Department that, as of 31 August 2017, there are 1,576 active claims, of which 573 claimants have been paid compensation from the ICF subject to the 65%/€825,000 limits. The Liquidator is currently working on the next batch of claims to be included in the next application to the High Court scheduled to be made in February 2018 in accordance with the legislation.

Over and above the 65% ICF payment, it is expected that a proportion of the balance of money due to third party claimants 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. In this regard, a preliminary assessment was carried out by Towers Watson in 2014 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 a new actuarial report is being commissioned and should be completed in Q4 2017.

Before the Government can make a full assessment of any case for further payment of compensation to Setanta claimants, it will need to review the updated actuarial report on the available proceeds of the assets for distribution from the liquidation process. This will provide a clear indication of the extent of any shortfall (i.e. the difference between the full amount and the combined total of the 65% payment plus the Setanta distribution). 

Finally, there is a legal concern that any Government intervention could undermine the priority status of claimants in the liquidation. The Department is therefore seeking legal advice on the impact on the State's ability to recover from the liquidated company if it were to compensate third party claimants.