THE CENTRAL BANK was first informed of problems at Setanta Insurance in November of last year according to Minister for Finance Michael Noonan.
An estimated 75,000 customers are believed to have been left without insurance cover after the company entered announced that they were going into liquidation.
Policyholders at the provider were also told last month that claims may not be honoured.
The Maltese based insurance provider announced in January of this year that they would stop taking on new business but had insisted that they would honour existing claims.
But in an update on its website last month, the company told customers that, as a result of the liquidation process, claims may not be met in full.
In the Dáil last week, Sinn Féin’s Pearse Doherty TD asked Minister Noonan when the financial regulator first became aware that the company was in trouble. Noonan said this happened towards the end of 2013:
The Central Bank have informed me that they have been in discussions with the Malta Financial Services Authority in relation to Setanta since November 2013 when the Central Bank identified issues during a consumer protection themed inspection. The Central Bank have also informed me that there was regular contact in the following months which led to the announcement in January, 2014 that the firm would cease writing new business and issuing further renewals.
Noonan added that himself and his department were told of the concerns on 21 January, about a week before Setanta made their public announcement that they would cease trading.
Responding to the minister’s answer, Doherty says that the department and financial regulator have questions to answer about how they kept customers informed.
“The fact that the minister and financial regulator were aware of potential issues for months raises grave questions about how they handled the situation and whether the rights of policy holders were fully respected.”
“It has been reported that even since the minister and regulator became aware that the company was in difficulty it had still been selling insurance. The legality of this practice and the extent to which the regulator and department were aware of it must be questioned,” he added.
The Motor Insurance Bureau of Ireland says it will accept third-party claims connected to Setanta policies.
Doherty also says that he understands that first party claims can be made to the Insurance Compensation Fund which can cover 65 per cent of most claims.
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