The President of the Law Society of Ireland, John P Shaw, has today expressed grave concern at the great shock and anxiety among claimants and those holding policies with Setanta Insurance.
It was announced on 16 April 2014 that the Malta-registered insurer was going into liquidation.
“Confusion over payment of these claims, which are likely to number over a thousand, has left many consumers worried that they will not receive the whole amount of their entitlement. In the case of policyholders, there is a concern they will be personally liable for any successfully made claims,” said Mr Shaw.
Mr Shaw has received advice that the Motor Insurers Bureau of Ireland (MIBI)[1] will be liable for any shortfall in monies owed to claimants but is concerned that the MIBI may seek reimbursement of any monies paid by policy holders who are now effectively uninsured. Mr Shaw has also sought assurances from the Insurance Compensation Fund that in those circumstances, policyholders who purchased such policies in good faith would be covered.
“The Law Society has written to both the MIBI and the Insurance Compensation Fund to confirm that no claimant will suffer any loss as a result of this event. I have received no response from the Insurance Compensation Fund and have received a non-committal letter from the MIBI in which they have not confirmed that they will be responsible for any shortfall.”
“It is entirely unsatisfactory that over a month after Setanta Insurance announced their liquidation, we have received no confirmation from the MIBI or the Insurance Compensation Fund[2]. Many of my solicitor colleagues are fielding calls from petrified clients who have simply been notified directly of the liquidation of this insurer.”
“It seems that the MIBI will be responsible for these claims and they should publicly confirm this now. Equally, the Insurance Compensation Fund should reassure worried policy-holders that they will not be personally liable and left with potentially huge claims to pay through no fault of their own.”
“The Law Society has provided guidance to our solicitor members that, in order to protect their clients’ interests, they should consider joining the MIBI as a party to every claim involving Setanta pending clarification of matters. The Injuries Board is providing similar guidance. This will have further legal cost implications, which will ultimately have to be shouldered by the policy-holder or the taxpayer.
“I call on the MIBI and The Insurance Compensation Fund to confirm that all claims will be covered in full and at no cost to the policyholder. They must also provide guidance as to how these outstanding claims can be resolved at the lowest possible cost.”
[1] The Motor Insurers’ Bureau of Ireland was established in 1955 by an Agreement between the Government and the companies underwriting motor insurance in Ireland for the purpose of compensating victims of road traffic accidents caused by uninsured and unidentified vehicles.
[2] The Insurance Compensation Fund is designed to facilitate payments on claims, where an EU- or Irish-authorised provider of non-life insurance policies goes into liquidation, and the High Court has approved such payments. These payments are subject to certain limitations and exceptions.