It has been announced that the State will reimburse the third party claimants that have been left out of pocket by the now defunct Setanta Insurance.
Setanta Insurance was placed into liquidation by the Malta Financial Services Authority on 30th April 2014 and is being liquidated under Maltese law.
There is currently approximately 1,600 claims which will cost somewhere in the region of €90 million to cover.
Donegal TD Pat the Cope Gallagher has welcomed the news, saying it is an issue he has raised since Setanta ceased operating in 2014.
“Almost four years on, former policyholders have been left in the lurch, facing the prospect of being held personally liable for outstanding claims and claimants have been unable to secure 100% of their claim.
“The announcement is an important step forward but delivery is what really matters.”
The Fianna Fáil TD says that he will raise the issue “until all outstanding claims from the Setanta collapse are settled in full.”
Finance Minister Paschal Donohoe and Minister of State Michael D’Arcy have announced that the decision to reimburse will also apply to a similar case – Enterprise Insurance – that has also left claimants out of pocket by not being compensated fully through the Insurance Compensation Fund (ICF) mechanism.
The liquidation of Setanta was the subject of a protracted court case as to whether the Motor Insurers’ Bureau of Ireland (MIBI) or the Insurance Compensation Fund (ICF) was liable in respect of third party motor insurance claims. Last May, the Supreme Court deemed the ICF responsible for the payment of such claims (up to 65% of the claim or €825,000 whichever is the lessor leaving a shortfall of 35%).
A Bill is now being drafted by the Department of Finance and the Office of Parliamentary Council which proposes to increase the level of Insurance Compensation Fund coverage for all future third party motor claims from its current 65% level to 100% in order to bring it into line with the compensation levels paid out by the MIBI.
A statement released by the Department of Finance outlines: “It is the Government’s view that the Setanta insolvency and the subsequent Supreme Court ruling has highlighted an inequity between awards for third party claimants from MIBI in respect of uninsured or unidentified drivers, where personal injuries are compensated in full, compared with compensation from the ICF in the event of an insolvency where limits of 65% of the claim or €825,000 whichever is the lessor apply.”
Speaking on the decision Minister Donohoe stated: “I have carefully considered the matter including recent legal advice I have received plus an update from the Liquidator, and on the basis of this I have come to the conclusion that if the State steps in to pay the 35% shortfall, it should be able to recover the bulk of what the third party claimants themselves would have received from the Liquidator.
“By taking this step now and compensating in full, it is hoped that this will encourage the settlement of outstanding claims as quickly as possible.”
Minister of State D’Arcy stated: “Officials at the Department of Finance are currently discussing with the Attorney General’s Office whether there are any competition or legal issues such as State aid associated with such an intervention and what if anything are the consequences of this.
“Once clarity is obtained on this matter, we will announce further details on how we intend to facilitate such payments to Setanta third party claimants.”Tags: