Sunday 23 October 2016

Drivers 'could wait years' for Setanta payout

Published 11/06/2015 | 02:30

Fianna Fáil’s finance spokesman Michael McGrath claimed the Government’s handling of the Setanta issue was 'a shambles'
Fianna Fáil’s finance spokesman Michael McGrath claimed the Government’s handling of the Setanta issue was 'a shambles'

It could be more than two years before those with a claim related to collapsed insurer Setanta get a payout.

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And there is such a large shortfall that there will only be enough money to pay 30pc of the claims, the Irish Independent has learned.

Fianna Fáil's finance spokesman Michael McGrath claimed the Government's handling of the Setanta issue was "a shambles".

There are 1,700 people who made claims on Setanta policies, as they were insured with it or made a claim against someone who was covered by the insurer, Minister for Finance Michael Noonan admitted in the Dail to Mr McGrath.

The total bill could be €95m. But the liquidator will only pay out the claims when all the company's liabilities are quantified.

And a dispute has broken out in the High Court between a compensation fund set up by insurers and a statutory fund administered by the Central Bank over which body is to pay for the shortfall.

It is due to be heard on July 13, with the case set to sort out which fund is to compensate policyholders.

Mr Noonan said working out the cost of all claims is set to take at least two years.

"Since it could some time for a particular case to be finalised and, under the statute of limitations, claimants are given two years following an accident to make an initial claim, it may take some years before the liquidation process is completed," the minister told Mr McGrath in the Dáil.

The wind-up has been complicated by the fact that it was headquartered in Malta and regulated there. A Malta-based liquidator has been appointed to wind up the company.

Close to 100,000 drivers were left scrambling to get cover when Setanta shut down.

The total cost of the 1,710 open Setanta claims will be between €87.7m and €95.2m, Mr McGrath was told.

This figure includes provision for claims not yet reported as well as a provision for deterioration in the position of currently open claims.

"The liquidator has also informed my department that based on these claims estimates, he does not expect to be in a position to meet more than 30pc of the amounts due to Setanta creditors," Mr Noonan said.

Mr McGrath said: "The handling of this issue has been a shambles from the beginning. Over a year on from the collapse of Setanta, there is no clarity on fundamental issues affecting Setanta claimants."

Irish Independent

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