Pearse Doherty (Donegal, Sinn Fein)
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30. To ask the Minister for Finance if his attention has been drawn to the fact that there is a legal pause in cases related to a company (details supplied) due to the fact solicitors and barristers acting on behalf of the insurance compensation fund are seeking Government assurance on the position of uninsured defendants. [44713/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government is very conscious of the difficulties that the delays in the Setanta liquidation process is causing for claimants who are due compensation. The Government remains committed to progressing payments of the 65% portion of settled claims to third party Setanta claimants as quickly as possible.

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. 

The Liquidator has informed my Department that, as of 30 September 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 process of settling claims is still ongoing and are subject in some cases to complex negotiations between all relevant parties. The Liquidator is currently working on settled claims and preparing them for inclusion in the next application to the High Court, expected to be made in February 2018.

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. An actuarial report, commissioned by the liquidator, estimates the claims reserves at 30 June 2017 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, rather than the not more than 30% of claims figure previously indicated.

I am aware of the issue referred to by the Deputy regarding the potential liability of Setanta policyholders to third party claimants in the event they do not receive full compensation.  On the question of a Government assurance for such policyholders, I cannot make any commitment on this matter as there is a legal concern that any Government intervention could undermine the priority status of claimants in the liquidation. Consequently, the Department of Finance is 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 for the balance due to them. Once the Department has clarified this legal concern, the Government will be in a better position to consider its response to this issue.