Regulator to detail Quinn Insurance concerns

INITIAL findings from the Financial Regulator’s investigations into management dealings at Quinn Insurance could come to light within the next fortnight.

The regulator is due to set out its concerns on April 12, which is the next full sitting of the High Court.

Last Tuesday’s granting of two administrators to Quinn Insurance, following an application made to the High Court by the regulator, came between full sittings of the court, the last of which was on March 26.

A spokesperson for the regulator said investigations into “certain matters that have very recently come to light” are ongoing. It remains to be seen, though, just what new findings from those investigations will be made public later this month. “We will be setting out our concerns in a full hearing of the High Court on April 12,” the spokesperson added.

Under the regulator’s administrative sanctions procedures, the maximum fine that can be imposed on a company for breaches of regulation amount to €5 million.

While the regulator has declined to detail the matters of concern, they are believed to relate to instances of double accounting – specifically that the company was showing assets on its balance sheet that were already pledged against borrowings made by the group in recent years. This would mean it didn’t have ownership of the money in question.

In its defence, the Quinn Group said: “We understand that he [the regulator] is referring to guarantees provided by certain subsidiaries of Quinn Insurance, some dating back to 2005, supporting the general indebtedness of the Quinn Group.

“These guarantees are entirely lawful, do not breach any insurance regulations, and were fully disclosed in the statutory accounts of the relevant companies.”

Regulator Matthew Elderfield said earlier this week that there was evidence that Quinn Insurance’s financial strength has been overstated to the tune of around €450m.