Charlie McConalogue (Donegal, Fianna Fail)
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131. To ask the Minister for Finance the reason the Government has not agreed to cover 100% of compensation claims against persons (details supplied); if this means former customers are now potentially liable for partial costs of claims; if he will reconsider his approach on this issue; and if he will make a statement on the matter. [43664/17]

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.

As you are aware, 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. Under the current legislation 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. 

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. The liquidator commissioned actuarial consultants, Willis Towers Watson, to carry out an analysis of Setanta Insurance's claims reserves as at 30 June 2017 and this has now been completed. The report estimates the claims reserves at between €105.9 million and €112.9 million. This is an increase from the first report in 2014, which estimated the claims reserves at between €87.7 million and €95.2 million.

A consequence of this is that based on this actuarial report, the liquidator now estimates that he will not be in a position to meet more than 22% of the claims out of the assets of the liquidation once all matters in the liquidation have been concluded, rather than the not more  than 30% of claims figure previously indicated. 

My Department is currently considering the implications of this actuarial report. In addition, you should note that there is also a legal concern that any Government intervention could undermine the priority status of claimants in the liquidation. The Department of Finance 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.

Once this legal concern is clarified, the Government will be in a better position to consider its response to this issue including the implications this may have for all connected persons.