Thursday 19 September 2019

Danish fund will pick up tab following the collapse of insurer

Michael McGrath, Fianna Fáil finance spokesman. Photo: Collins
Michael McGrath, Fianna Fáil finance spokesman. Photo: Collins

Charlie Weston and Gavin McLoughlin

Insurance policyholders are set to escape having to meet the cost of claims from the collapse of Danish insurer Qudos.

This is because the insurance company has been declared bankrupt in a court in Denmark, meaning the bill for outstanding claims will have to be picked up by the Danish authorities.

There are more than 1,500 claims in the system.

A change in the law in Denmark last May could have meant the Danish scheme would not have been liable to meet Irish claims if Qudos was declared bankrupt after January 1.

Qudos was authorised and regulated in Denmark, but traded here under European Union freedom of services rules, selling through Wexford-based agent Patrona. It had 50,000 Irish customers.

Ireland's Insurance Compensation Fund, funded by a levy on premiums, would have been forced to pay the outstanding claims of the policyholders here if Qudos was declared bankrupt from the start of January.

The Irish fund is already being used to fund claims related to the multi-billion euro black hole in Quinn Insurance and claims related to Setanta Insurance.

The Danish Financial Supervisory Authority said in a statement: "The Danish insurance company Qudos Insurance A/S has been declared bankrupt. The Danish Guarantee Fund for non-life insurance undertakings will cover some claims incurred four weeks after the liquidator has notified the policyholders of the bankruptcy."

There are 1,544 open Irish claims relating to Qudos Insurance - 155 are household claims and 1,389 relate to motor insurance.

The cost of settling these claims is likely to run to tens of millions of euro.

The firm's 51,000 policyholders were provided with alternative cover by the Qudos agent, Patrona Underwriting.

Fianna Fáil finance spokesman Michael McGrath said it was now essential the claims are paid quickly, unlike the situation with Setanta.

Irish Independent

Also in Business