Drivers face wait over Setanta claims

Thousands of Irish drivers could have to wait months to find out if their insurance claims will be covered by the assets of bust provider Setanta Insurance, a Dáil committee was told yesterday.

The Joint Oireachtas Committee on Finance, Public Expenditure and Reform heard that the liquidation of the company, which operated in the Irish market but was regulated in Malta, is in the early stages and could take “two months or so”.

Setanta went out of business in April, leaving 75,000 Irish policyholders without cover and many out of pocket having already paid premiums.

It has now emerged that at least 2,000 drivers have made claims totalling almost €35m. With indications that the company’s liabilities exceed their assets, it is unlikely that all of these claims will be covered by the liquidation of the insurance provider.

In response to questioning from Fianna Fáil TD, Michael McGrath, Department of Finance principal officer, Pat Casey said that the numbers were preliminary figures provided by the liquidator and subject to change.

“[The total] is in the region of 2,000 claims but the caveat that [the liquidator] has put in relation to that is that all figures quoted are subject to changes as more info is received,” said Mr Casey.

The committee also heard that a fund Finance Minister Michael Noonan had previously told the Dáil would be available to third party Setanta claimants may in fact not be open to these drivers.

Mr Noonan told the Dáil in April that drivers making a claim against a Setanta policyholder would have their claim dealt with by the Motor Insurance Bureau of Ireland.

The committee heard that the bureau is taking legal advice on the issue and is likely to clarify its position in the coming days.

Central Bank officials also admitted they had concerns over the financial state of Setanta as far back as last September; two months earlier than had previously been disclosed and seven months before it advised policyholders to make alternative arrangements for motor insurance.

Central Bank director of consumer protection, Bernard Sheridan told the committee the bank had acted in the best interests of the 75,000 Irish policyholders by carrying out a limited investigation into Setanta’s affairs based on their concerns, and reporting these misgivings to the appropriate regulatory body, the Malta Financial Services Authority.

The committee also heard claimants may be entitled to payment through the High Court-administered Insurance Compensation Fund which pays out up to 65% of eligible claims.

Despite concerns that commercial policy holders would not be able to access this fund, the liquidator has indicated that each case would be judged on an individual basis.