A deal has been agreed for the transfer of Quinn Insurance’s portfolio of UK and European legacy liabilities to a subsidiary of Bermuda-based Catalina Holdings.
Catalina, through its Irish subsidiary Catalina Insurance Ireland, has signed a definitive agreement with Quinn Insurance for the transfer of liabilities from the company established by former billionaire Sean Quinn, which is currently in administration.
The joint administrators of Quinn Insurance, Michael McAteer and Paul McCann of Grant Thornton, said they were pleased to confirm the deal, subject to High Court approval.
“This sale represents another very significant step towards substantially completing the administration of Quinn Insurance Ltd. The joint administrators are confident that this transaction, if approved by the High Court, will go some considerable way towards ensuring that the final cost of the Quinn Insurance Limited administration will be below the previously estimated guide of up to €1.3bn.”
The insurance group was put into administration in 2010 at the request of Matthew Elderfield, the then financial regulator, with an estimated cost to the taxpayer of €738m later being outlined by Finance Minster Michael Noonan.
At the time, the minister announced a 2% levy on insurance policies from all insurers for the following 12 years which were intended to replenish the Insurance Compensation Fund which was tapped into by the administrators to pay outstanding claims and other costs.
As of April last year, policyholders of motor, home, and commercial insurance had paid a total of €126.33m to the fund, according to figures provided by Mr Noonan.
The joint administrators said yesterday they are now focused on achieving the earliest possible completion date of the administration and maximising the recovery for Irish policyholders in its litigation against Quinn Insurance’s former auditors, PriceWaterhouseCoopers (PwC).
The administrators are suing PwC for approximately €1bn.
The portfolio of liabilities to be acquired by Catalina had gross and net insurance liabilities of €463m and €461m, respectively, as of the end of September last.
As part of the transfer process, Catalina will inject required capital into Catalina Ireland, the company said.
Total assets of Catalina, following the completion of the proposed transfer, will be in excess of $3.3bn (€2.78m).
Catalina Ireland is domiciled in Ireland and regulated by the Central Bank of Ireland.
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