The Maltese liquidator appointed to sort out the mess left by the collapse of the Irish Setanta insurance company, Paul Mercieca, hopes to be in a position to make an application to the Irish Courts to access the appropriate compensation fund by mid-January.
The Irish Courts’ “accountant” administers the Irish Insurance Compensation Fund, which will be compensating eligible claimants.
Setanta had collapsed at the beginning of 2014 when it was admitted that it did not have enough funds to cover eventual claims.
Paul Mercieca has had to collate information on four different types of compensation that might be requested. There were 75,000 policyholders who were stranded with no motor insurance cover when Setanta shut down; these will be expecting a refund of their premiums.
There are also around 2,000 claims for accidents which were submitted to Setanta and were not settled before it shut down.
To add to the complications, there are also around 400 claims which ended up in court, including personal injury claims; clearly the actual amount due for these will not be known until the cases reach judgment. And finally there is a two-year period during which new claims can still be filed: claims are still being submitted – although the rate has obviously slowed down considerably – and Setanta has six employees handling them.
The Irish media have quoted £35 million as being the total due for claims but, once the pending court cases are factored in, the figure could increase
Mr Mercieca said he had appointed actuaries to help him assess the potential claims so that he could come up with an indicative figure for the total compensation that will be required.
The Irish media have quoted £35 million as being the total due for claims but, once the pending court cases are factored in, the figure could increase.
The compensation will need to come out of Setanta’s assets – which are all liquid – and the fund. However, the latter cannot compensate for premiums paid and it can only pay up to 65 per cent of claims or £825,000, whichever is the lowest. It can also only pay individuals – and since many of Setanta’s clients were companies who had group motor insurance policies, Mr Mercieca will have a hard time trying to come up with an equitable split of the money available.
“I hope to file the necessary application in the Irish courts by mid-January as this to me is fundamental in helping to unlock the claims situation,” Mr Mercieca said.
Setanta was registered and regulated in Malta. However, it operated in Ireland and, like other insurers, paid into the Irish Insurance Compensation Fund.
However, this is the first case of its kind and the numerous entities involved are all anxious to get it sorted out – and as fairly as possible – sooner rather than later.
The Irish media has followed the case closely, repeatedly asking why Ireland would be responsible for the compensation – and not Malta.
As part of his remit, Mr Mercieca is also reviewing Setanta’s history in order to establish what went wrong and when.