Car insurance needs supervision at EU level
Eoghan Murphy who is the Minister of State at the Departments of Finance and Public Expenditure and Reform has said that car insurance needs supervision at European level.
The fear is that the insurance industry could face another Setanta and this was brought up last month by Senator Kiernan O'Donnell in the Oireachtas Finance Committee.
The Supreme Court came to a welcome decision on the Setanta case between the Motor Insurers' Bureau of Ireland and the Law Society of Ireland
The decision was in favour of the insurers and it removes the uncertainty that has seriously delayed the payment of over 1,600 outstanding third party claims.
The plan is to accelerate the claims process and resolve all the issues which have been outstanding since Setanta collapsed in 2014. The first payments from the Insurance Fund are expected shortly.
There is an issue with the compensation fund as it can only cover up to 65pc of people's claims, with about another 30% coming from the distribution of Setanta’s assets.
As a result, some customers may lose out as some claims won't be dealt with immediately because they have not yet been settled.
This situation should never be allowed to happen again, where a customer is left without compensation for a claim through no fault of their own.
The Department of Finance will and the Oireachtas are moving quickly to progress legislation in order to protect motor insurance customers who may face the same situation in the future.
This will mean that the Government will plan for 100pc coverage in the event of a company collapse.
The Central Bank of Ireland is taking a firmer stance in its handling of such situations by enhancing its Market Intelligence on Freedom of Services firms and maintaining regular contact with the regulators of insurance firms conducting business in Ireland.
The Central Bank is also conducting more on-site inspections of intermediaries and managing general agencies who distribute products underwritten by Freedom of Services insurers.
Eoghan Murphy believes that the best insurance we have against another Setanta happening is for all stakeholders to continue to deliver on urgent reform.
Only when these reforms are implemented will Ireland to begin to lead in Europe on the application of better and consistent regulatory and supervisory standards.