Fianna Fáil TD for Roscommon-Galway, Eugene Murphy has called on the Government to do more to protect Setanta Insurance policy holders who are now been held responsible for up to 35 per cent of the cost of claims despite been fully insured at the time of an incident.
Deputy Murphy said: “I have been contacted by a distressed constituent who has been advised by his own solicitor that he may have to sell his home if the damages awarded in a case against him in the High Court has a short fall due to the liquidation of Setanta Insurance. The gentleman was fully insured at the time of the accident by Setanta and now could face a bill of tens of thousands of euros.”
Setanta Insurance was incorporated in Malta and carried out its business in Ireland. The firm collapsed in 2014 and left outstanding claims of €90 million unpaid, driving up premiums and leaving customers unprotected.
“Setanta Insurance customers who have been found to have been liable in cases taken against them, and who are now being sued for large sums of money are only 65% covered by the Insurance Federation Compensation fund that is there to cover costs in cases of this type,” explained Deputy Murphy.
The Insurance Federation Compensation fund was set up pursuant to the 1964 Insurance Act to meet certain claims against insolvent insurance companies. The fund can be accessed by Setanta in respect of ongoing cases but the amount paid out by the fund will only be up to 65% of the settlement. Therefore the defendant is liable for the shortfall. In certain cases
The Fianna Fáil TD said that this was particularly cruel, as law abiding citizens who have insurance are been held accountable for large sums of money because their insurance company collapsed.
“However those who chose not to insure vehicles and drive illegally on our roads are covered 100% by the Insurance Compensation fund. I am calling on the Government to intervene in this situation and protect the 16,000 Setanta policy holders who are been held accountable for the business dealings of Setanta Insurance and its management,” Murphy concluded.
A judge at Ennis Circuit Court last month said that it “beggars belief” that Setanta traded as it did. Judge Gerald Keys also called on the state to intervene to make up any shortfall in payments.