Setanta payout ‘to take years’

Customers of the defunct Setanta Insurance could be forced to wait years for outstanding claims to be met as the insurer’s liquidation drags into its second year.

The Maltese-registered insurer operated in the Irish market before going bust in April of last year, leaving 75,000 Irish customers without cover. However, the liquidator can’t pay a cent in compensation to former policyholders until the company’s entire liabilities have been established.

Complicating matters for those awaiting compensation are more than 600 court cases, all of which will have to be resolved before a true assessment of liabilities can be determined. The liquidator, Paul Mercieca, said yesterday that this process could take years.

The best hope for a swifter resolution to the situation, described by members of the Oireachtas finance committee as a “mess”, lies in the outcome of a legal wrangle which will decide which of two insurance compensation funds will help reimburse customers.

The attorney general’s advice that the Motor Insurers’ Bureau of Ireland (MIBI) would not have to foot any of the bill for outstanding claims has been called into question by the Law Society, extending the wait for former policyholders.

If MIBI is not liable for the claims, the Insurance Compensation Fund — which can only cover up to 65% of claims, unlike MIBI which has no such limit — will again come into play.

Mr Mercieca said the total claims liability could surpass €90m, with the sale of the insurers’ assets likely to cover up to 30% of the total.

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