The Motor Insurance Bureau of Ireland (MIBI) intends to accept all third-party claims against insurance policies written by Setanta Insurance Company, the Malta-registered insurance company that has gone into liquidation.
Minister for Finance Michael Noonan made the announcement yesterday in response to a question from Fianna Fáil's finance spokesman Michael McGrath.
The MIBI is a non-profit organisation established by the Government and companies underwriting motor insurance in Ireland to compensate victims of accidents caused by uninsured and unidentified vehicles.
Setanta collapsed on April 16th, leaving 75,000 motor policyholders in Ireland with no cover. On Wednesday, the Central Bank said it had been advised by the Malta Financial Services Authority that a liquidator has been appointed to Setanta, who will be responsible for the administration of the company's assets and liabilities.
Mr Noonan said first-party claims on personal insurance policies will be payable from the Insurance Compensation Fund (ICF), once Setanta was formally placed into liquidation.
Claimants would be eligible for 65 per cent of the amount due or €825,000, whichever is the lesser amount. Under legislation, first-party claims by a corporate entity are not covered by the ICF.
The Minister added that neither the ICF nor the MIBI would refund premiums for commercial and personal insurance policies. The Minister said a “portion” of the premium refunds may be available upon completion of the Setanta liquidation.
The Central Bank has engaged with more than 230 brokers who were offering policies from Setanta to consumers to require them to contact policyholders and inform them of the urgency to make alternative insurance arrangements.
In reply to a separate question, Mr Noonan told Mr McGrath that the balance in the ICF was €31.2 million as of April 25th.
The ICF was set up to protect policyholders in the event that their non-life insurer became insolvent. This became a big issue here in the wake of Quinn Insurance being placed into administration by the Central Bank of Ireland.
A levy of up to 2 per cent of gross written premiums is paid into the fund each year by the insurers.
