IBA president John Bissett said the whole system needs to be changed so that companies cannot simply pick the most lax jurisdictions to base themselves in.
“The system in its current state allows insurance companies, which are primarily owned by Irish people and principally based in Ireland, to sell exclusively to Irish customers — but to be regulated in a different jurisdiction.
“The Setanta debacle is a clear example of how this regulatory structure is not appropriate and is not protecting Irish consumers. Insurance entities operating in Ireland, selling to Irish consumers should be regulated by the Central Bank of Ireland,” he said.
Mr Bissett pointed to an announcement from the Maltese regulator that had assured Setanta customers they would be covered for any claims in the future, issued in January, and he called for a full investigation into how and why the regulator made the statement.
“The communication stated that Setanta Insurance ‘had advised the Malta Financial Services Authority that it is business as usual in terms of payment of claims’. A full investigation is now required to understand what happened and to ensure a similar situation doesn’t arise again,” he said. The IBA is calling on the Maltese liquidator to apply to the Irish High Court to ensure policyholders can access the Insurance Compensation Fund. “In an era of heightened regulation, Irish consumers need to know that they are protected, regardless of where that entity is regulated,” Mr Bissett added.