The MIBI argues it should not have to pay out the claims and wants the Appeal Court to set aside a judgment in the High Court by Mr Justice John Hedigan it was liable to pay out in respect of claims against persons who were insured with Setanta at the time of its liquidation.
The case has important implications for motor insurance premia as well as parties involved in claims concerning Setanta.
Yesterday, Brian Murray, counsel for the society, rejected the MIBI’s arguments the High Court judgment is in any way flawed and should be set aside.
Mr Murray said it was envisaged in all the various agreements governing the MIBI’s since it was established in the 1950s it would have to pay out in the event one of its members became insolvent.
The MIBI had failed to show to the court where in the agreement it was shown that it was not liable to pay out in the event judgment is obtained against the holder of a policy issue by a motor insurer, which was a member of the MIBI, had become insolvent, counsel submitted.
Mr Murray was making his submission on the second day of the MIBI’s appeal before the President of the Court of Appeal Mr Justice Seán Ryan, Ms Justice Mary Finlay Geoghegan, and Mr Justice Gerard Hogan.
It is expected to conclude today.
The High Court was asked to determine whether the MIBI, which is operated under the terms of an agreement between the Government and those companies underwriting motor insurance in Ireland to deal with claims related to uninsured drivers, or the Insurance Compensation Fund which covers claims in respect of insolvent insurance companies, were liable for the claims.
Following Setanta’s liquidation approximately 1,750 claims by and against Setanta policyholders remained in existence.