Copenhagen insurer Qudos Insurance has filed for bankruptcy, meaning Danish authorities will pick up the tab for 1,400 Irish claims, estimated to run into tens of millions of euro.
Qudos, which sold insurance in the Republic through local agent Patrona, went into solvent liquidation in Denmark late last month and said on December 4th that it was no longer paying insurance claims. The company had about 50,000 Irish customers at the time, mainly covering commercial and motor policies, though it is understood that most of these have now been transferred to other providers.
Last week, the Minister for Finance Paschal Donohoe said his department had been advised by Denmark's finance ministry that if Qudos was placed into bankruptcy after January 1st, 2019, the Danish Insurance Guarantee Scheme would not be liable to meet claims. This would have meant that the Irish Insurance Compensation Fund (ICF) would be liable.
However, Qudos’s filing for bankruptcy on Thursday in Copenhagen will result in the Danish fund taking responsibility for claims, including those from Irish customers of the failed company. Qudos began writing Irish business in 2013.
Outstanding claims
Insurance Ireland, the industry representative body, welcomed the development.
“Thankfully, the cost of these claims will now be covered by the Danish guarantee fund. The priority now is ensuring that Irish policyholders with outstanding claims are given clarity on how and when their claims will be settled by the Danish Guarantee Fund,” a spokesman for the organisation said.
The Danish Financial Supervisory Authority (DFSA) said the country’s compensation fund covers claims incurred before the date of the bankruptcy and up to four weeks after that the date.
“If a policyholder has a claim that is covered by the guarantee fund, the claim must be reported as soon as possible and no later than 20 June 2019,” it said, adding that claims reported to Qudos up until now are regarded as reported to the guarantee fund, and that it has opened a hotline for enquiries.
The Central Bank said that it is “strongly recommending that the small number of remaining Irish policyholders arrange alternative cover with immediate effect”. It added that it is working with the DFSA to ensure that all Irish policyholders are identified and communicated with directly.
Liquidation
The High Court last month approved payments of more than €20 million out of the ICF to meet a 35 per cent shortfall in awards concerning motorists insured by the collapsed Malta-based insurer Setanta Insurance, which went into liquidation in 2014.
This was the fourth High Court application since 2016 for approvals for payments out of the fund relating to Setanta. The court had previously sanctioned payment out of the ICF of 65 per cent due under Setanta policies.
