The collapse of Dublin-based, Malta-domiciled insurer Setanta continues to have repercussions on the Irish motor insurance market. Within the next seven days cancellation notices are to be sent to former Setanta customers, who were mainly in the SME commercial motor sector. As many as 75,000 policyholders will need to buy another policy within the seven to 10-day notice period that will apply from the date of the cancellation letter. Following that date their policies will not be valid in any way.
In an announcement in late January Setanta said that it would cease writing new business and stop renewals from close of business on January 24 2014. Heritage was appointed to manage the run-off. At that time it was hoped that the policies in force could be run off to expiry.
That plan was abandoned in April (Reactions, April 20 2014) when Setanta surrendered its insurance licence and effectively dissolved itself, appointing Louis Cassar Pullicino of Valetta, Malta, as liquidator.
If claims are made against a holder of a Setanta policy for an event before the cancellation of the policy is effective, customers will need to use the Irish Compensation Fund.
The Central Bank of Ireland, which regulates insurance in the Republic, said that it had been in discussions with the more than 230 brokers who were offering policies from Setanta, and that the brokers had been asked to contact any Setanta policyholders as a matter of urgency.
Setanta was established in 2007 and was authorised to write in Ireland by the Malta Financial Services Association on a freedom of services basis..
The Irish Brokers Association (IBA) has demanded a complete overhaul of insurance regulation. The fact that Setanta's head office was in Malta appears to have come as a shock to many customers and not a few brokers, who had assumed that the Dublin base meant that Setanta would be regulated under Irish law. IBA group president John Bissett said that companies that were mainly owned by Irish people, which employed most of its staff in Ireland and sold most of its policies in Ireland should not be allowed to choose tax-friendly jurisdictions as a legal base.