The Malta-based company, which primarily focused on providing van insurance to small and medium enterprises, went bust earlier this year.
Cancellation notices will be sent to all Setanta customers in the next seven days, after which a further 7-10 days’ notice will be given to each customer.
The company said it would not be able to repay premiums — meaning that many people are being forced to pay for their insurance twice.
If claims are made against any Setanta policyholders for the period during which they were insured by the firm, the customers will only be able to turn to the Irish Compensation Fund.
Customers/solicitors will have to make an application to the High Court to access the fund, which covers Irish insurance customers in the event of such collapses.
At the time the company dissolved, customers were told that Setanta Insurance was not regulated by the Central Bank of Ireland but by Maltese authorities due to the location of its head office.
Yesterday, the liquidator confirmed that all policy holders, who have not already done so should arrange alternative cover without delay as claims are unlikely to be paid in full and once the notice period expires, all policies will be cancelled by the liquidator.
A spokesman for the Central Bank said it is in ongoing contact with the Malta Financial Services Authority.
“The Central Bank has been engaging with over 230 brokers who were offering policies from Setanta Insurance to consumers to request they immediately contact any Setanta policyholder and inform them of the urgency to make alternative motor insurance arrangements,” the spokesman said.
“The Central Bank has also been in contact with the Irish broker’s representative bodies, the Department of Finance and Insurance Ireland.”
In recent weeks, the Irish Brokers Association called for the Central Bank to ensure compensation is available for consumers impacted by the sudden liquidation.
It also urged a complete overhaul of insurance regulation. John Bissett, the group’s president, said the whole system needs to be changed so that companies primarily owned by Irish people and principally based in Ireland cannot pick the most lax jurisdictions in which to base themselves.
There were warning signs as far back as January, when Setanta Insurance said it was winding up its Irish business and ceasing to take on new customers.