The Central Bank has decided against fining Quinn Insurance Limited, not because the firm is innocent but because it is entirely reliant on funding from the insurance compensation fund.
In a statement, the Central Bank said it was not in the public interest to fine Quinn Insurance. “The Central Bank considers that the contraventions committed by the firm merit the maximum monetary penalty that can be levied by the Central Bank on a regulated financial services provider, namely €5m.
“However, the firm is under administration and is entirely reliant on funding from the Insurance Compensation Fund. In these wholly exceptional circumstances, the Central Bank has decided that it is in the public interest to waive the monetary penalty in its entirety.”
The Central Bank found that Quinn Insurance fell short of its minimum solvency requirements by €830m in 2009 and that the board of the company were unaware that its subsidiaries had guaranteed the Quinn group for €1.2bn.
The Central Bank said that a decision to establish the guarantees was made by two shareholders who failed to tell the board, and having “contributed substantially to the firm entering into administration”.
The Central Bank’s head of enforcement, Derville Rowland, said the failings in Quinn Insurance had a severe impact on taxpayers.
“The facts of this case contributed to the failure of one of the State’s largest insurers — an event which has had severe financial consequences for Ireland’s insurance industry and the Irish taxpayer,” she said.
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