INTERVIEW
Issue 29
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July 2, 2015
Distributed with Times of Malta
Hiving off property management means the board can focus on core operations, Farsons chairman Louis Farrugia explains. see pages 10 and 11 >
NEWS Loans from banks could be as much as €1,150 million lower by 2016 than they should be given the projected economic growth, the Central Bank of Malta warned. see page 3 >
Setanta claims reach €90m Vanessa Macdonald The Irish High Court will convene on July 13 to determine whether the Motor Insurance Bureau of Ireland could – or should – help to make up the expected shortfall of nearly €60 million to Setanta clients. Setanta is the Malta-registered motor insurance company that collapsed over a year ago. The appointed liquidator, Paul Mercieca, said that it was hoped that judgment would follow shortly after. “The resolution of the court case as soon as possible is critical in unlocking the claims situation and the longer this takes will be to everybody’s detriment. Setanta was set up in 2007 but collapsed and stopped trading in April 2014 after it declared that it did not have enough money to settle all
claims – most related to motor vehicles. The situation has escalated since then as more claims emerged about accidents and injuries. There are over 600 known court cases involving Setanta claims – and the liability has already risen to €90m. “It must be emphasised that this is just a best estimate based upon the actuarial advice that I have today,” Mr Mercieca said. There are around 1,750 claimants – as well as around 75,000 clients who want refunds of premiums – who need payment and Mr Mercieca estimates that only 30 per cent of the amount due will be paid from Setanta’s assets. A meeting for creditors was held in Malta last week, attended by around 25 claimants in person, with many other represented by proxy. Claimants are getting more and more frustrated by the delays with frequent complaints in the Irish
media and still no clarity on who is going to make up the shortfall. “We spent several months working hand in hand with the competent authorities in Ireland, dealing with very complex issues, and it was hoped that the first tranche of claims would be put forward for consideration by the Insurance Compensation Fund by mid-February of this year. Unfortunately, at the eleventh hour,” Mr Mercieca told The Business Observer. “Much to my frustration, the accountant of the Courts of Justice, who is responsible for the administration of the fund, received legal advice, contradicting earlier advice that he had received, that MIBI possibly has a role to play in the settlement of claims. “As a result the claims process was stalled until it is determined whether the fund or MIBI will have a role in settling claims.”
MIBI was set up to compensate victims of road traffic accidents caused by the negligent driving of uninsured drivers. At the meeting last week, the creditors were also expecting to be told whether there was any possibility for legal action to be instituted by the liquidator in the appropriate courts against directors and shadow directors of the company. “At the meeting, my legal counsel gave a report of his findings to date, but emphasised that further analysis of the roles of the various directors/shadow directors is needed before considering what action, if any, should be taken,” Mr Mercieca said. “It was also agreed that this matter will be taken up with the creditors’ committee, which was appointed at the meeting, once the lawyers have completed their work.”
NEWS Over three-quarters of financial services companies that have at least one vacancy have hard-to-fill positions, according to the MFSA’s skills need survey. see page 5 >
OPINION Economist Philip von Brockdorff analyses the recent pension proposals to see whether we can really avoid raising the retirement age. see page 15 >