More than 1,500 Irish claims left in limbo as insurance firm Qudos goes into liquidation
More than 1,500 Irish insurance claims are in limbo after Danish insurance company Qudos was placed into liquidation.
Patrona, an Irish insurance company providing administration services for Qudos here, said there were 1,570 claims "ongoing" in which Qudos was involved.
Whether Qudos will be able to pay claims is in serious doubt after the company's liquidators put payouts on hold, saying they were gathering information on the business.
It may turn out that Qudos claims will be paid in full - but they may not.
The Central Bank has "strongly" advised Qudos's 50,000 Irish customers to seek alternative cover in case they need to make a claim.
Qudos was operating in the motor, commercial motor, logistics and haulage, and household insurance sectors here. It did business via brokers, meaning that some customers may be unaware Qudos is their ultimate underwriter.
Patrona said: "In relation to claims, we have not received any formal instructions from the liquidator at this stage, other than public notifications that claims will not be paid for one to two weeks. The liquidator has stated that this is for administrative reasons while they evaluate the Qudos position and put the necessary infrastructure in place."
Patrona added it had provided brokers with options to replace policies for Qudos customers. Anyone left on the hook for a claim may be able to claim compensation from the Danish or Irish funds set up to pay claims from liquidated insurers.
"At the present time, Qudos has not exposed policyholders to any of the compensation funds and we will have to wait and see if their involvement will be required. Denmark has a guarantee fund that is designed to step in and pay compensation if an insurance company is liquidated. In addition to this there is also the Insurance Compensation Fund in Ireland, we expect the two regulatory bodies will be in discussion," Patrona said.
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.
The situation with Qudos has inevitably raised fears that Irish insurance customers will be hit with the cost of unpaid claims via levies - as seen with the collapses of Setanta Insurance or Quinn Insurance.
Fianna Fáil finance spokesperson Michael McGrath said Qudos "must not turn into another Setanta".
"Clearly, urgent steps need to be taken ... a fully functioning European insurance market is crucial for customers to get affordable and fair insurance cover but the required regulatory mechanisms need to be put in place to protect customers and claimants," Mr McGrath said.
"When Qudos or Setanta or any other insurance company goes into liquidation, it is Irish customers who end up footing the bill. One must ask: why there is no such mechanism at a European level?
"The immediate concern is outstanding claims and whether they will still be paid out from the liquidation process. At this point, we do not know the exposure to the Irish market and I call on the Minister for Finance, the Central Bank and the liquidator to provide clarity in this respect as soon as possible."