Claim by Quinn Insurance could see end of 2% levy
Firm may be forced to pay for insurer’s bailout, currently funded by 2% levy
PricewaterhouseCoopers said it will “vigorously defend” the case against it, which is “devoid of merit”.
The 2 per cent levy imposed on all insurance policies to cover the shortfall at Quinn Insurance could be reduced or even scrapped, if PricewaterhouseCoopers (PwC) loses a €1 billion negligence claim lodged against it by the insurance company’s administrators.
Michael McAteer of accountancy firm Grant Thornton, one of the administrators appointed to Quinn Insurance at the request of the Financial Regulator, told the High Court yesterday any damages awarded against PwC, which audited Quinn’s accounts, will be used to repay a €1.1 billion bailout of Quinn by the industry’s Insurance Compensation Fund.
The strain of the bailout led the fund to seek ongoing State support, with about €450 million lent by the exchequer to the fund last year and at least €150 million paid out so far this year.
The State has imposed a 2 per cent levy on all non-life policies – such as home and motor insurance – to recoup the cost. It has been previously estimated that the levy could remain in place until 2030.
In an application to the High Court yesterday to have the negligence case against PwC over the Quinn collapse admitted to the Commercial Court, Mr McAteer said a win for the administrators “would put the Government in a position whereby it could alter the levy”.
PwC said it will “vigorously defend” the case against it, which is “devoid of merit”.