Quinn says €1.65bn cost to State fund 'truly shocking'
BUSINESSMAN SEÁN Quinn has described the €1.65 billion potential cost of his former insurance company, Quinn Insurance, to the State’s Insurance Compensation Fund as “truly shocking”.
The High Court and the Department of Finance should seek further information on how administrators appointed to the company in 2010 arrived at “this astronomical figure”, the bankrupt businessman said in a statement.
Mr Quinn repeated his assertion that Quinn Insurance, part of his Quinn Group of businesses, was placed into administration unnecessarily in March 2010.
The Central Bank sought the appointment of administrators on concerns about the solvency of the country’s second-largest insurer after it was made aware of guarantees provided by subsidiaries of the insurer on Quinn Group debts.
The regulator told the court at that time that the effect of the guarantee on debts of €1.27 billion was to reduce the value of the company’s assets by €448 million.
Mr Quinn reiterated in his statement that the administrators were appointed on incorrect assumptions relied on by the regulator regarding the effect of the guarantees on the solvency of the insurer.
The guarantees were in place since 2005, signed off by the auditors to the insurance firm and “historically viewed as having no effect whatsoever on the solvency position of the company”, he said.
“My biggest regret in all of this is not challenging the provisional appointment of the administrators,” said Mr Quinn.
The Central Bank official who made the regulator’s case for the appointment of administrators in 2010 told the court this week that the insurer’s losses related to the failure to set aside enough provisions to cover claims prior to their appointment when the insurer was still part of the Quinn Group.
The escalating cost to the State compensation fund, resulting in a 2 per cent levy on home and motor insurance policyholders, has led to a dispute between Minister for Finance Michael Noonan and the administrators.
The Minister has said that he was “at a loss” to understand how the administrators could have under-estimated the losses at the insurer by such a large amount.
One of the administrators, Michael McAteer of Grant Thornton, told the court on Tuesday that the costs rose as more and more problems were discovered over the past two years.
Meanwhile, the administrators yesterday appointed actuary Aidan Sherry, a former head of Axa Financial in Ireland, as chief financial officer of the insurer.