Regulator further relaxes Quinn ban

THE Financial Regulator has further relaxed its ban on Quinn Insurance (QIL) doing business in Britain and Northern Ireland, allowing the company to fully resume offering motor insurance to customers.

The regulator made the decision last night – on the eve of an expected job cuts announcement by Quinn’s administrators – after what it called “detailed discussions” with its British counterpart, the Financial Services Authority (FSA), and QIL’s administrators.

However, the company’s administrators are still set to announce a “very significant level of redundancies” later today; although the initial number could be less than the 800 reported yesterday.

The regulator had already allowed Quinn UK to offer motor insurance for provisional licence holders, but this only covers 10% of the company’s business. Last night’s extension is understood to cover around a third of Quinn’s British-based business.

Earlier in the day the Joint Oireachtas Committee on Enterprise, Trade and Employment said that it would be asking the regulator to open more profitable avenues of QIL’s UK business, after hearing pleas from a team of representatives of the firm’s employees.

The representatives criticised the methodology of the regulator in forcing a full closure, last month, of Quinn’s British business and the “delay” in allowing some kind of re-entry into the market – adding that the closure has cost the company €46.5m in the last month and 2,000 customers per day.

“It is difficult to comprehend the reasons for this delay, given that a business plan was submitted by the administrators just eight days after being placed in provisional administration – a business plan which clearly demonstrated that numerous segments of the book were highly profitable,” Quinn representative Joe Lynch told the committee.

Mr Lynch added that the loss-making QIL UK had been anticipating “significant growth” for 2010 and the addition of around 1,000 jobs to its workforce over the coming three years.

The company’s representatives added that employment – rather than solvency levels – was now the burning issue and called for a 100% re-opening of the British business, with incremental shut-downs as the administrators see fit, as an alternative course of action.

A statement from Quinn Insurance last night welcomed the latest move by the regulator but warned it will incorporate “significant pricing changes”, which will probably lead to “significantly lower volumes than were previously written by QIL in the UK private motor market”.