The state will pay for the collapsed Setanta Insurance - but customers still have to wait
A significant court ruling means other insurers won’t be liable for the Maltese firm.
CUSTOMERS WAITING FOR to be paid following the collapse of Setanta Insurance have been told they may face further delays despite the state being ruled liable for their claims.
The Supreme Court ruled yesterday that the taxpayer-backed Insurance Compensation Fund (ICF) is liable for monies owed to claimants after the failure of the Maltese-registered company in April 2014.
However the ICF can only cover 65% of a claim – up to a maximum of €825,000. It is believed that the total amount owing from the collapsed firm could total €95 million.
In a statement yesterday, the Department of Finance said that the ICF will now “commence the process of making payment”.
This process will not happen immediately, however, with a spokesperson for the department saying details of this process still need to be worked though.
Since the ruling, the liquidators of Setanta have placed a message on the website of the insurer outlining that the implications of the decision are being considered.
“As the details of the Supreme Court ruling have just become available, all interested parties, including the liquidator, are currently undertaking a comprehensive assessment of the implications of this decision,” the message reads.
“The liquidator is keen to progress the payment of claims and is liaising with all relevant parties to agree the next steps to achieve this. As soon as the implications of the Supreme Court judgment have been considered an update will be published.”
The message also specifies that yesterday’s ruling means claims will be paid by the ICF but that refunds of premiums owed to policyholders will not.
Instead, these liabilities will be part of the overall distribution Setanta’s net assets that are divided up at the conclusion of the liquidation process. It is understood around €12 million is owed to policyholders.
Insurers’ relief
The Supreme Court ruling comes after car insurers appealed an earlier High Court decision that left them potentially holding the can for Setanta’s failure.
The prior judgement meant the Motor Insurers’ Bureau of Ireland (MIBI), an industry-funded body responsible for paying the victims of uninsured drivers, was effectively liable for the 1,750 claims left behind in the liquidation.
MIBI claimed the move would push up the cost of the average policy by €52.50 as its members passed on the costs to consumers.
Meanwhile, reacting to yesterday’s Supreme Court decision, Sinn Féin’s Pearse Doherty said it must be made clear to claimants what is going to happen next.
“The liquidator needs to write to all those waiting compensation as soon as possible informing them when they will receive compensation,” he said.
Written by Rónán Duffy and posted on TheJournal.ie. Additional reporting Peter Bodkin.
