Regulator defends action on Quinn Insurance

Ireland's Financial Regulator tonight defended placing beleaguered Quinn Insurance into administration insisting there had been a serious and persistent breach of regulations.

Matthew Elderfield denied he had taken a heavy-handed approach stressing the rules were there to protect the company's 1.3 million policyholders.

Sean Quinn was granted a week-long reprieve by the High Court on Monday over attempts to place his flagship insurance company into permanent administration.

But the watchdog told TDs and Senators he would change his approach if someone came up with the cash to plug the €150m solvency hole.

"And I've said all along, in all the discussions with the company, show me the money, and we'll take a different approach, but no-one's been forthcoming," the former Bermuda-based regulator said.

The firm has been denied the right to source new business in the UK since Mr Elderfield stepped in.

Employees vowed to demonstrate outside his Dublin headquarters on Friday amid fears for jobs and warning the insurance wing was losing up to €1.5m a day over the ban.

"Northern Ireland/UK business represents over 50% of Quinn Insurance's book and we are losing between 1-1.5m per day as a result of not being able to trade in NI/UK," a statement from the workers said.

"As Quinn Insurance is the only Irish insurer trading in this market this is lost export business and as such the Irish economy is losing millions in tax revenue."

But Mr Elderfield denied his dramatic intervention was over-the-top.

"I don't think we acted with haste or heavy handed," he told a parliamentary committee.

"We had a serious and persistent breach over years. There are long-standing solvency rules, designed to protect the 1.3 million policy holders.

"If somebody comes up with the money to fill the solvency breach, we'll change our approach.

"But my commitment is to make sure that those 1.3 million policy holders are operating in a safe and sound environment.

"So we think that the appointment of administers are in the best interests of the policy holders."

The company, which was due to find out the watchdog's thoughts on its in-house refinancing plans today, is facing a High Court showdown next Monday over administration.

Mr Elderfield was given a last minute "lengthy affidavit" from beleaguered Quinn Insurance just as a hearing was about to start earlier this week.

The watchdog told the Oireachtas Economic Regulatory Affairs Committee that he hoped the question of administration would be resolved next week.

Mr Elderfield said he was sympathetic with the plight of the 5,500 employees who were fearful for their jobs, claiming that in meetings with employees he explained it was a very serious situation.

"The problems that have arisen have to be laid at a different door and we have to take action to solve the situation and I was prepared to say that directly to the employees and I think they understood where I was coming from," he said.

"I recognise that it's a very difficult situation for them and I have a huge amount of sympathy, but my responsibility has to be to those policy holders."

Experts at London firm Talbot Hughes McKillop (THM) have been asked to help restructure the multinational as the family and group faces total debts of about €4bn.

Mr Elderfield also said there were two other companies in recent months which had breached the required solvency level but provided cash within days. Two other companies had been placed in administration.