On 16 April 2014, Setanta Insurance Ireland Limited (Setanta) announced that they were surrendering their Insurance Business Licence to the Malta Financial Services Authority and ceasing business with immediate effect.
It is noted that a Maltese liquidator has been appointed with an initial creditors meeting taking place in Valletta on 30 April 2014. The liquidation of an Insurer is an unprecedented event, with approximately 75,000 policyholders affected and with over a thousand claims in being, (either just arising or already notified to the insurer, going through the PIAB process, currently going through the court or settled by way of agreement or judgement).
There is provision in Irish law for such events by way of the Insurance Act 1964 and The Insurance (amendment) Act 2011 which established the Insurance Compensation Fund as well as the 2009 Motor Insurer’s Bureau of Ireland Agreement dated 29 January 2009 (the 2009 MIBI Agreement) and made between the Bureau and the Minister for Transport. This provides for the compensation of victims of uninsured drivers, who are involved in an accident.
The Insurance Compensation Fund is maintained and administered by the President of the High Court through the Accountant of the High Court. The primary objective of the fund is to facilitate payments to policyholders within the jurisdiction where an Irish or EU authorised non-life Insurer goes into liquidation and Irish policyholders are affected. An application to the Fund can be made by the Accountant of the High Court seeking distribution of funds due to policyholders up to a maximum of 65% of any sums due to a policyholder, capped at €825,000.
As Setanta is now in liquidation and all policies of insurance have been cancelled, a situation has now arisen where former policyholders of Setanta, who are subject to personal injuries claims are deemed to be uninsured. As solicitors for claimants, we must have due regard to our professional obligations and take appropriate steps to protect our clients’ interests pending determination of the liquidation and the involvement of the Insurance Compensation Fund.
We are hoping for some clarification from the MIBI and/or the Insurance Compensation Fund in due course.The Law society of Ireland is also involved in seeking further clarity.
– an advice note from Holland Condon Solicitors Kilkenny