Eugene Murphy (Roscommon-Galway, Fianna Fail)
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34. To ask the Minister for Finance the steps his Department is taking to protect a person (details supplied) who was fully insured when they were involved in a road traffic accident and are now accountable for 35% of a claim against their insurance due to the fact their insurance provider went into liquidation; and if he will make a statement on the matter. [44540/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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While I cannot comment on individual cases, you will be aware that 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. 

On the question of what steps are being taken to protect Setanta policyholders against claims by third party claimants in the event they do not receive full compensation, the Government cannot make any commitment on this matter at this time as there is a legal concern that any 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.