Fianna Fáil is demanding the Government develop what it says should be a “coherent policy on motor insurance before more claimants are left in the lurch”.
In a response to a parliamentary question from Michael McGrath, Fianna Fáil’s finance spokesman, Finance Minister Michael Noonan said he was told by Setanta’s liquidator that the number of open claims was 1,678 as of May 31 and that the claims reserves position stands at between €87.7m and €95.2m.
“Progress in the liquidation of Setanta Insurance has been awaiting the outcome of legal proceedings in the case of the Law Society of Ireland versus the Motor Insurers’ Bureau of Ireland (MIBI),”said the minister.
“On September 4, 2015, the High Court held that the MIBI is liable in respect of claims against the policyholders of Setanta. This decision was appealed by the MIBI and the Court of Appeal upheld the High Court decision. The MIBI has been granted leave to appeal the decision to the Supreme Court.”
The minister said final settlements “can only be paid out after all of the company’s liabilities are quantified, including claims”.
“The liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims,” he added.
Mr McGrath said the collapse of Setanta has been “nothing short of a fiasco”.
“It is 27 months since the collapse of the insurer and outstanding claims of around €90m remain. All the while, the issue of who picks up the tab is being played out in the courts. While the minister has laid out a new policy in the area of motor insurance compensation when an insurer is put into liquidation, it is not clear when this will be implemented. In fact, the representative body of insurance companies, Insurance Ireland, has said the new policy ‘poses a systemic risk to the motor insurance market’,” he said.
He said premiums are continuing to rise as the Government tries to get to grips with the situation: “The Government needs to develop and implement a policy on motor insurance before more claimants are left in the lurch while others can simply no longer afford to remain on the road due to spiralling motor insurance costs.”
Last week, the Government announced steps which it said would strengthen compensation protections when an insurer fails. The recommendations of the report of the review of the framework for motor insurance compensation are designed to ensure customers with third party insurance will have full cover.
Currently, the Insurance Compensation Fund (ICF) covers 65% of the claim cost but the report recommends this be increased to 100%. The increased coverage will be funded by the motor insurance industry via a contribution to the Motor Insurers’ Bureau of Ireland.