Setanta Insurance, a Maltese Company trading only in Ireland gave notice on the 17th of April last that it was ceasing to trade. This decision was made as it was agreed by the members that a solvent run off of the company was not possible and therefore it was resolved to surrender its licence. A liquidator is to be appointed at a members meeting on the 30th of April when a statement of affairs is to be put before the meeting. It is unprecedented that a foreign registered Insurance Company providing compulsory vehicle insurance in Ireland has become insolvent. It is estimated that 75,000 policy holders are affected by the collapse of Setanta. The Insurance Brokers Association of Ireland arranged temporary cover with Liberty Insurance up to the 25th of April, 2014. The purpose of the temporary cover was to provide Setanta policy holders with an opportunity to procure suitable alternative insurance cover for their vehicles. Although the Central Bank of Ireland provides for a two month notification period for the cancellation of an insurance policy it would be unsafe for Setanta policy holders continue to drive their vehicles during the two month cancellation period if they have not arranged suitable alternative motor insurance cover.
It is anticipated that there will not be sufficient funds for Setanta Insurance to honour outstanding liabilities in full. In due course it is anticipated that the Liquidator, during the course of liquidation should be in a position to confirm the reduced pro-rata basis upon which it will be in a position to provide funds for claims against policies. Any shortfall in respect of the compensation to be provided is expected to be made up by the Insurance Compensation Fund and/or the Motor Insurers Bureau of Ireland. The Motor Insurance Bureau of Ireland are mandated to provide insurance cover for third parties who have suffered loss as a result of having been involved in a road traffic with an uninsured driver. That obligation is in respect of injuries or damage to the property arising from the road traffic accident. Where the third party intends to invoke the benefit of the Motor Insurers Bureau of Ireland scheme it is important to bear in mind that there are certain obligations which must be met in order to receive the benefit of the scheme. If you have been involved in a road traffic accident with a third party who were insured by Setanta Insurance and require legal advice please contact Gearoid Howard of this office who will be happy to answer your queries.