Another motor insurance company goes bust - 14,000 Irish policyholders

Leo said:
You've never been to Iceland, have you?
Click to expand...
I don't need to visit the place or live there to laud some of their actions against financial industry crooks. As well as beating England in a recent soccer-ball competition they seem a praise-worthy bunch.

mathepac said:
In this country it's not even a good idea to deal with an insurer or bank you have heard of or might have dealt with for years. There is no protection for policy-holders / depositors / victims of other failed financial services organisations. ... The Dellboys flock here and breed because they have lots to gain and risk no penalties.
Click to expand...
 
Well, policyholders and depositors were certainly protected during the recent financial meltdown.

Lots of people that worked in banks lost their jobs and three of our most prominent former bank officials will be sentenced this coming Friday for conspiracy to defraud.

The UK and US probably have the most sophisticated regulatory regimes in the world and both these jurisdictions have had their fair share of controversies in recent times.

Our Central Bank was rightly castigated in the wake of our financial meltdown. No question about it. However, that doesn't mean that consumers are somehow absolved of the need to be vigilant and prudent about who they transact with.

The reality is that financial regulation will always be imperfect. However, simple common sense never goes out of style.
 
I find it strange on the one hand that people are complaining about oversea regulation and how you shouldn't do business with overseas insurers and other people complain about the inability of the Irish regulators to regulate just about anything. We can't have it both ways

It really is a case of caveat emptor and why for something like insurance it may be safer to go with a larger more established provider.
 
@Sarenco How on earth did you reach that conclusion?

We are still paying insurance levies for the bail-out of PMPA, ICI (AIB) etc for crying out loud. The government bailed out the failed, insolvent banks, for government read tax-payer. Each one of us, citizens all, is still in the red to the tune of €25,000 per person.

The central banks in the US & UK are in private ownership and are not arms of government, they have a different agenda.

Buying a financial product, like car insurance, has always been a lottery in this country because the Central Bank continues to fail in its duties and responsibilities. For Sean & Sheila Citizen, buying motor insurance is one of the areas where we need the sophisticated insight and protection supposedly housed in our Central Bankers. Time and time again they have failed us, the tax-payers, purchasers of financial services products, including motor insurance. They are good at the "blame game" though and contributors here seem to be singing off the same song-sheet :-

"In July 2009, a senior Central Bank official told the Oireachtas Enterprise Committee that shareholders (later corrected/clarified to refer to institutional investors) who lost their money in the banking collapse were to blame for their fate and got what was coming to them for not keeping bank chiefs in check. The official did admit that the Central Bank had failed to give sufficient warning about reckless lending to property developers. The Governor later described the share wipeout in which tens of thousands of investors lost their lives’ savings as a "stock exchange adjustment" Wikipedia quoting from articles in the Evening Herald and Irish Mirror.

"The Central Bank of Ireland’s mandate calls on it to contribute to the well being of the people of Ireland and more widely in Europe by performing statutory responsibilities which cover a wide range, including :
  • financial stability;
  • consumer protection;
  • supervision and enforcement;
  • regulatory policy development;
  • the provision of economic advice and financial statistics; and
  • the recovery and resolution of distressed financial services firms." extracted for Wikipedia quoting the Central Bank's own Strategic Plan to 2020 as the source. Looks like we can rate this as Failed to Meet Objectives.
 
Sorry I meant to add that the Central Bank, independent of any EU regulation, can insist that any motor insurer wishing to transact business here have sufficient liquid assets in the State to cover claims / losses or can prove that their potential liabilities are sufficiently covered by their own re-insurance.
 
mathepac said:
I don't need to visit the place or live there to laud some of their actions against financial industry crooks. As well as beating England in a recent soccer-ball competition they seem a praise-worthy bunch.
Click to expand...

Fair enough, you're happy with the course of action they took. You don't have to live with the consequences though. I'm very happy we didn't follow their lead.
 
It's gas to see Iceland lauded as a champion of consumers. They wiped out savers to meet the undischarged debts of a buccaneering financial industry that made the worst Irish banks look like school children.

As for the US and UK central banks being independent of government, the career of Alan Greenspan and Mark Carney's recent Brexit embarrassment each knock that one for six.
 
mathepac said:
Sorry I meant to add that the Central Bank, independent of any EU regulation, can insist that any motor insurer wishing to transact business here have sufficient liquid assets in the State to cover claims / losses or can prove that their potential liabilities are sufficiently covered by their own re-insurance.
Click to expand...

That's news to me - can you provide a link?

An insurer authorised in one EEA member state is entitled to write business in any other EEA member state, subject to completing an administrative process. The Central Bank can certainly liaise with the home state regulator (the GFSC in this case) regarding the financial position of the insurer in question (which they apparently did in this case) but they cannot insist on additional reserving or solvency measures - that is the responsibility of the home state regulator.

It's certainly true that all insurance companies underwriting motor insurance in Ireland must, by law, be members of MIBI and contribute to the funding of claims in proportion to their market share.
 
mathepac said:
@Sarenco
The central banks in the US & UK are in private ownership and are not arms of government, they have a different agenda.
Click to expand...

Neither the FED nor the Bank of England has any role in the authorisation or prudential supervision of insurance companies. They are both independent of any executive or legislative branch of government (as is the case with our Central Bank) but they are certainly not in private ownership.

I've no idea what relevance the quote from Wikipedia has to do with the protection of depositors or policyholders.

I've already expressed the view that the Central Bank was rightly castigated in the wake of our financial meltdown. We seem to be in violent agreement on this point.
 
Sarenco said:
Neither the FED nor the Bank of England has any role in the authorisation or prudential supervision of insurance companies. They are both independent of any executive or legislative branch of government (as is the case with our Central Bank) but they are certainly not in private ownership...
Click to expand...

http://www.federalreserve.gov/faqs/about_14986.htm

Who owns the Federal Reserve?

"The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks."

So commercial banks in each of the the regions own shares, up to 6% each, in the Federal Reserve Banks. So the Federal Reserve Bank, through this share ownership of its 12 constituent FEDs is in private, commercial banking ownership.
 
Eh, that link specifically states that the FED is not a private institution and is subject to Congress oversight.

In any event, the FED has nothing to do with the authorisation or supervision of insurers. In the US insurers are still largely regulated on a State-by-State basis by local commissioners.
 
You must log in or register to reply here.
Back
Top