THE QUINN Group has heavily criticised the Financial Regulator’s decision yesterday not to allow Quinn Insurance Limited (QIL), which is in administration, to write new commercial business in the UK.
In a statement issued late yesterday, the board of Quinn Group said: “The announcement today will be a huge disappointment to the many customers, particularly in the SME sector, who insure with QIL in the UK and Northern Ireland and have been very supportive of the company for many years.
“The Financial Regulator today has cited lack of available capital which we understand has resulted from an assumed subsidiary asset value of zero.
“This is despite the fact that the assets referred to remain in place, with no call from the group’s financiers before or since administration and no indication that such demand is expected in the future.
“It is also despite the fact that, as per the administrator’s recent statements, the company is trading robustly and has no issue with liquidity.”
Quinn Group said commercial UK business was QIL’s most “profitable” line in 2009 and 2010 and the decision “should be reconsidered” by the regulator. Quinn Group remains Quinn Insurance Ltd’s ultimate shareholder, even though the regulator appointed joint administrators on March 30th.
The regulator initially blocked QIL from writing any new business in the UK but subsequently allowed the administrators to re-enter the motor market.
In May, the administrators – Michael McAteer and Paul McCann of Grant Thornton – made an application to write new commercial lines. That request was rejected yesterday.
The administrators said the regulator had concluded that these proposals required additional capital that QIL was not able to provide. However this might be reviewed once additional capital and appropriate solvency levels have been attained. Quinn Insurance Ltd is for sale with the administrators seeking first-round bids by September 17th.
The regulator said the decision does not affect QIL’s authorisation to write UK private motor insurance or its general business here.
Its settlement of claims on extant UK commercial business is also unaffected.
In a statement, Quinn Insurance Limited said that due to the strong performance of other divisions, “those employees working on UK commercial insurance will be redeployed . . . and there will be no further job losses”.
QIL made a trading loss of €127.5 million on its underwriting activities last year. The UK accounted for €86 million of this with commercial lines losing €31 million.
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