After raising the issue once again in the Dáil Chamber, Fianna Fáil Spokesperson on Finance, Michael McGrath has said that “it’s been just over six months now since the Supreme Court made its decision on the Setanta Insurance case and still no clarity has been provided for both claimants and former policy holders.”
Deputy McGrath commented, “The rules of the Insurance Compensation Fund mean that it can only pay out 65 per cent of the claim or €825,000 whichever is less. In recent weeks we have learned that the liquidation process will only cover 22 per cent of the value of outstanding claims leaving a significant portion of compensation left unpaid by both the liquidation and the Insurance Compensation Fund.
“The real effect of all this is that former policyholders who took out their insurance in good faith could be left personally liable for the balance of outstanding claims. Indeed former policyholders are receiving letters from solicitors informing them that they could be personally on the hook. This is obviously causing enormous stress for people who took out a valid insurance policy in this State and did nothing wrong.
“Claimants also continue to be left completely in lurch. There remain 1,576 active claims outstanding and it is not clear when these claims will be settled. Some claimants have been asked to sign waivers pledging not to go after policyholders for the balance of outstanding claims. Understandably, claimants are reluctant to do this so many settlement cases have stalled completely as a result.
“I have met and spoken with people caught up in this nightmare and some of the stories are heart-breaking. The Government has refused to face up to the seriousness of this problem. Clarity needs to be provided for all the people involved and no person – be they a claimant or a former policyholder – should be left out of pocket from this liquidation.
“The Government needs to bring the insurance industry in and they need to collectively arrive at a solution whereby the full bill is settled and settled quickly. Legislation is urgently needed that would allow the Insurance Compensation Fund to pay claims more frequently than once every six months which is currently the case.
“It is simply unacceptable that over three and a half years after Setanta’s collapse, people are still left in a deeply uncertain and precarious position. I have continually raised this issue yet the responses I have received to date have offered little comfort to those caught up in this mess. We will continue to raise this issue until former policyholders are protected and all claims have been settled in full,” concluded McGrath.