Financial Regulator says Quinn decision was in best interest of policyholders

THE Financial Regulator said he did not act hastily or in a heavy-handed manner in applying for the appointment of provisional administrators to Quinn Insurance late last month.

Answering questions from a Dáil committee, Matthew Elderfield said the action was taken in the interests of Quinn Insurance’s 1.3 million policyholders.

“I will state that we are faced with a serious and persistent breach of the solvency requirements of a major insurance company and that we are determined to take action to protect the interests of its policyholders,” he said.

Mr Elderfield said he was hoping for a final resolution to come from the High Court hearing related to Quinn on Monday.

The regulator said the recent recapitalisation framework was aimed at delivering a definitive solution to the banks’ funding issue. Mr Elderfield said that while he was still awaiting AIB’s recapitalisation plan, there was a strong prospect of Bank of Ireland reaching its funding targets independently.

Regarding Anglo Irish Bank, he reiterated that its proposed post-NAMA two tiered form of an asset management division to manage its remaining bad assets and a small new bank, “which could make money“, along the lines of what happened with British lender Northern Rock could be the best way forward.

“My own view is that the costs of a rapid wind-up of the bank would be prohibitively expensive and that the structure that is being developed is a reasonable way to minimise the costs to the taxpayer. Anglo is now less about its systemic importance and more about the cheapest solution,” he added.

He also pointed out that some banks involved in the NAMA process had asked for more time to meet the regulator’s new requirements.