Nearly 1,700 Setanta Insurance claims still in limbo

"Nothing short of a fiasco," according to Fianna Fáil’s finance spokesperson Michael McGrath...

The claims of nearly 1,700 Setanta Insurance customers have yet to be resolved, according to the Department of Finance.

The Maltese-based insurance firm was wound up in April 2014, with it later being announced that its liquidation process would not be covered by a fund for victims of uninsured drivers.

Finance Minister Michael Noonan has said the delay is due to the fact that Motor Insurers' Bureau of Ireland (MIBI) has been granted an appeal to the Supreme Court.

Last September, the High Court had held that the MIBI was liable in respect of claims against the policy holders of Setanta.

Responding to Fianna Fáil’s finance spokesperson Michael McGrath, Noonan said that although he would not have a detailed response until after legal proceedings had ended, there were 1,678 open claims at the end of May.

The claims reserves positions stands at between €87.7 million and €95.2 million.

Noonan said:

"The liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal. 

"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."

Calling it "nothing short of a fiasco", McGrath said:

“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."

McGrath argued that similar cases would continue following the similar collapse of Enterprise Insurance last week.

He said:

“While the Minister for Finance has laid out a new policy in the area of motor insurance compensation when an insurer is put into liquidation, it is not at all 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’.

"The risk now is that those affected by the collapse of Enterprise Insurance will be treated in the same way as the victims of the Setanta collapse.

"Meanwhile, premiums are continuing to rise at an unsustainable rate as the government tries to get to grips with the situation."