EC backs Quinn Insurance sale

THE European Commission has given the go-ahead for the sale of Quinn Insurance to the US insurer, Liberty Mutual Group.

Now only the agreement of the Central Bank is required to finalise the deal.

The transfer is set to be completed on October 4 in a deal that promises to save the 1,570 jobs in the Republic and the North to continue to deal with the 275,000 existing insurance policies.

The sale, to a joint venture company formed by the Boston insurance company and Anglo Irish Bank, was precipitated by the collapse of the business empire of Sean Quinn, who was once the country’s richest man.

Once taken into administration its turnover dropped by two thirds, according to Mr Quinn, sending the once profitable company into debt.

The High Court was told in July by the administrators that losses had been reversed and the company was recording a profit for the first six months of the year.

But losses estimated at €693 million, which will not be taken over by the new owners, will instead by funded by the state insurance compensation fund. This will most likely be met by a levy on policyholders that is part offset by the sale of Quinn’s health insurance business.

Members of the Quinn family involved with the insurance business are suing over the way they have been treated, but any payments to them will not be met by the new owners, while claims for repayment of grants to state agencies, including Enterprise Ireland, will also remain with the old company.

The Quinn family owed €2.8 billion to Anglo Irish Bank, which took control of the Quinn Group last April and also the family’s €500 million property empire, all of which had been mortgaged to the bank.