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Seán Quinn founded his business in 1973 and it is now Ireland's biggest private company with a payroll of over 5,000. The Insurance business has been the cash cow of the operation. Business and personal debts amount to €4.0bn with €2.8bn owed by the Quinn family to the bankrupt State-controlled Anglo Irish Bank.
The Quinn Group today withdrew its objection to the appointment of permanent administrators of its insurance division.
On March 30th, provisional administrators were appointed to take control of Quinn Insurance, which has 1.3m customers, including those who transferred from the health insurance business of the Irish unit of UK company BUPA in late 2007. The Financial Regulator had claimed that Quinn was in serious breach of regulatory rules, by providing guarantees for borrowing by other units of the Quinn Group.
The High Court was told that Quinn Insurance would be run by two outside managers with the aim of protecting jobs and putting the business back on a sure financial footing. President of the High Court Nicholas Kearns said he believed the administrators were aware of the concerns of employees. “It was important to stress that it is part of the stated function of the administrators to carry it (Quinn Insurance) on as a going concern with a view to placing it on a sound commercial footing,” the judge said.
“No employment contract is determined by the appointment,” he added.
The regulator Matthew Elderfield told an Oireachtas Committee yesterday that there had been “serious and persistent breaches” of solvency rules at Quinn Insurance and he felt the appointment of permanent administrators to take control of the insurer was the best option for the 1.3 million policyholders.
Lawyers for the administrators said they wished to deliver their first report in a month. The case will be mentioned before the court again on May 20th.
In October 2008, under the ancien regime of 'light touch' or more often than not 'no touch' regulation, at the Central Bank, the Financial Regulator fined Quinn Insurance Limiteed (QIL) and Seán Quinn €3.4m for breaches of regulatory requirements. Quinn was forced to resign as a director at the time.
Seán Quinn lost €3bn in gambling on price movements on the shares of Anglo Irish Bank in 2006/2007 and he and his family now have a personal debt of €2.8bn to the bank i.e. Irish taxpayers. Separately, the Quinn Group owes lenders €1.2bn.
It's unlikely the bankrupt Anglo, now owned by the Irish State, will recover the Quinn debt.
Statement from Financial Regulator:
The Financial Regulator today welcomed the High Court's decision to confirm the appointment of a full time administrator at Quinn Insurance Limited (QIL). This follows QIL's decision to consent to the appointment made by the High Court on application by the Financial Regulator. It is the Financial Regulator's and QIL's opinion that this step is in the best interests of policyholders. QIL remains able to pay claims and renew policies in the normal way in the Republic of Ireland and continues to settle claims in the UK.
The Financial Regulator acts at all times in the best interests of policyholders and in the interests of the orderly regulation of the insurance market. The Financial Regulator considers the appointment of the administrator best serves the proper and orderly regulation of QIL and the wider insurance market.
Separately, the Financial Regulator continues its own investigations into the circumstances surrounding the creation of the guarantees.
The Financial Regulator will also continue to work with the Joint Administrators and the QIL Board to address issues to resolve the financial position of the firm in the interests of its policyholders.
