The Motor Insurance Bureau of Ireland (MIBI) has said that it will accept all third-party liability claims against policies underwritten by failed insurer Setanta, which was registered in Malta.
Minister for Finance Michael Noonan said on Thursday that first-party claims on personal policies would be paid out of the Insurance Compensation Fund. Claimants would be eligible for 65% of the amount due or €825,000, whichever was the lower amount. Commercial claims are not covered by the ICF. Most of Setanta's policies were with small businesses, who were offered the policies by about 230 brokers.
Setanta collapsed on April 16th. It had stated earlier in the year that it would not be writing any new policies.
The balance in the ICF was €31.2m as of April 25th, Finance Minister Noonan told opposition finance spokesman Michael McGrath in response to a parliamentary question.
However, the finances of the ICF are a sore point with politicians and consumers, because a levy of up to 2% a year is being charged on policies in order to pay for the collapsed part of Quinn Insurance.
Earlier in the week liquidator Paul Mercieca was named as liquidator to Setanta by the Maltese Financial Services Authority. The business is likely to be immediately dissolved.