Quinn Insurance transfer by Oct 7

THE transfer of the Quinn Insurance group to US insurance giant Liberty Mutual is expected to be completed by October 7 next, the High Court was told yesterday.

In their 8th interim report to the court since they were appointed joint administrators to Quinn in March last year, Michael McAteer and Paul McCann said the losses at the company had been stemmed and the operation is profitable. Profits before tax for the first three months of this year were €14 million and €24m for the first six months.

Bernard Dunleavy BL, for the joint administrators, told High Court president Mr Justice Nicholas Kearns in the latest report from his clients he wanted to highlight that it was now anticipated the sale of the company to Boston-based Liberty Mutual, in a joint venture involving Anglo Irish Bank, will be completed on October 7. However it will not be possible to complete certain regulatory and operational matters beyond the control of the administrators by that date, counsel said.

Figures on Quinn up to December 2009 showed losses of €902m, made up of €338m in investment losses while the remaining €564m was made up of operational losses attributable to business in the UK in 2009, counsel said.

Last May, the administrators estimated the total estimated call on the State Insurance Compensation Fund would be €600m but, counsel said, that had been increased to €693m because of outstanding claims. That fund was set up by the Government, in the wake of the PMPA collapse, to protect all policyholders in the event that an insurer cannot meet its liabilities.

It is anticipated there will be a large call on the fund. It will be offset by the payment of dividends from the sale of Quinn’s health insurance business, counsel said.

If transfer of the business to Liberty Mutual is successful on October 7, an application will be made for payment out of the fund, Mr Dunleavy said.

Liberty Mutual will be required to participate in a Central Bank authentication process and an independent actuary’s report will have to be prepared, counsel said.

In relation to fees charged by the administrators, Mr Dunleavy said 55 staff have been involved in an integration project required under EC merger regulations.

Reports will have to be prepared for the Central Bank and the Financial Service Authority in Britain as Quinn has 482,000 active policies in Ireland and Britain with 20,000 claims on those policies.

Mr Justice Kearns set October 4 for the hearing of the transfer application.