Following confirmation from the European Insurance and Occupational
Pensions Authority (EIOPA) that 1,595 households lost latent defect insurance
cover as a result of the failure of Alpha Insurance last year, Fianna Fáil
Spokesperson on Finance Michael McGrath has said there still no clarity on
whether alternative insurance has been organised for these homeowners.
Deputy McGrath commented, “Alpha Insurance was an insurance company that
operated in Ireland and was prudentially regulated in Denmark. It sold various types of insurance in Ireland
such as pet insurance. Crucially,
however, it sold latent defect insurance in Ireland. When Alpha insurance failed last year, many
homeowners would have lost cover and are most likely still without such cover.
“Typically, the builder takes out latent defect insurance to protect the
homeowner in the event that a major defect emerges with the home in
question. Up until now we knew that
there were 1,595 latent defect policies impacted by the failure of Alpha
Insurance but it was unclear how many residential units were covered by each
individual policy. EIOPA has now
confirmed that 1,595 households were impacted.
“However, what EIOPA is not able to confirm is how many of these 1,595
homeowners have been able to secure alternative insurance arrangements. It is
usually up to the builder to organise this but there is no guarantee that this
is taking place. It is my understanding that individuals are unable to take out
such insurance for themselves.
“The impact of this can be far reaching.
Not only can a homeowner be exposed if a major defect with the house is
found but also if the homeowner wishes to sell the property, they are likely to
be unable to do so if there is no latent defect insurance.
“It is critical that we get a fully functioning European market for insurance.
We need a more uniform and consistent regulatory regime across Europe and
adequate compensation schemes need to be in place to protect claimants when a
company goes bust. The Central Bank here
needs to ensure that everyone impacted by the failure of Alpha Insurance has
alternative insurance put in place”, concluded McGrath.