Customers urged to seek new deals as insurance firm wound up
Up to 50,000 Irish insurance customers have been left with no guarantee of cover after an underwriting company shut down.
Danish company Qudos has gone into liquidation, with payouts on claims being put on pause.
It means that Irish customers' cover with the firm is essentially worthless, and those awaiting payment of a claim from Qudos could be left on the hook.
Thousands more whose insurance is underwritten by Qudos will need to move quickly to find new policies.
The Central Bank of Ireland said it "strongly" recommended that Qudos customers seek alternative cover. The situation will inevitably raise fears that insurance customers will be hit with levies to cover unpaid claims - as seen with the collapses of Setanta Insurance or Quinn Insurance.
As it stands, it is not yet clear whether Qudos will be able to pay outstanding insurance claims.
If it turns out unpaid claims will not be settled, Irish customers will have to look for compensation if they don't want to pay for the cost of the claims themselves.
Liquidators who now control the company, and whose job it is to secure as much money as possible for Qudos's creditors, said they expect to provide a further update within one or two weeks.
Both Denmark and Ireland have dedicated funds for paying claims of liquidated insurers, and both are potential options depending on how the matter progresses.
The Central Bank is engaging with the Danish authorities, according to the Department of Finance.
It added that it "may take a number of weeks to establish the extent and nature of the insolvency".
Qudos provided services in Ireland through insurance brokers.
It primarily operated in the motor, household and logistics and haulage markets.
Patrona, an Irish insurance company who provided administration services for Qudos here, said it has offered alternative insurance products to brokers. The brokers can pass these on at no extra cost to policyholders.
The Qudos liquidators are unlikely to be able to provide refunds.
Patrona said: "In relation to claims, we have not received any formal instructions from the liquidator at this stage other than advice on the Qudos website today which states that claims will not be paid for one to two weeks.
"We can only assume at this stage that this is for administrative reasons while the liquidator evaluates the Qudos position and puts the necessary infrastructure in place," it added.
Patrona acknowledged the wait was "very frustrating for policyholders" and said that "as soon as we have more information we will be advising our brokers immediately".
Qudos is not the first insurance company operating in Ireland, but regulated elsewhere in Europe, to go into liquidation.
Setanta Insurance was regulated in Malta, while Enterprise Insurance, whose collapse also affected Irish customers, was regulated in Gibraltar.
On the matter of "passporting", Insurance Ireland, a representative group for the insurance industry here, said it "strongly supports a well-functioning cross-border insurance market where customers can avail of insurance cover across the European Union".
"But this must be underpinned by consistent regulation to protect the interests of customers," it added.