Quinn to get €738m payout from state fund

THE High Court has approved a total payment of up to €738 million of public money out of the state’s insurance compensation fund for Quinn Insurance, subject to deciding today whether the proposed sale of the insurer can proceed.

If the High Court approves the sale to a joint venture by US insurer Liberty Mutual and Anglo Irish Bank after a hearing today, his order means €320m will be paid out immediately, with further payments to be made later.

Mr Justice Kearns said that while he was aware of the implications for taxpayers of the €738m payment, the alternative scenario was a liquidation of the insurance group involving costs of up to €1.3bn.

He said he was satisfied a “comprehensive evaluation of all relevant factors” was undertaken on behalf of the group’s administrators prior to their application for the payment.

The administrators previously estimated the total demand on the fund would be €600m, but that was later updated to €738m.

Finance Minister Michael Noonan, through his counsel Sarah Berkley, earlier yesterday said there would be sufficient funds available, and supported the administrators’ application.

Mr Justice Kearns will today hear the administrators’ application for orders allowing the sale. The sale is dependent on several factors, including High Court approval and Liberty securing the necessary license from the Central Bank. Under the proposals, various conditions of sale must be fulfilled by December 16.

Lawyers for two groups, Concerned Irish Citizens and Concerned Irish Business, said they were anxious that Quinn’s 1,600 employees, policyholders and taxpayers should be protected.

Denis McDonald SC, for the administrators, said some information was confidential and could adversely affect the proposed sale if released.

He said that while €738m was a significant imposition on the taxpayer, the alternative would involve winding up the business, making all employees redundant and incurring a deficit of up to €1,300m, which would be “disastrous” for policyholders.

Yesterday’s hearing comes after the Dáil passed legislation last month to inject €240m into the insurance fund to meet the Quinn Insurance losses. The Insurance (Amendment) Bill also provides for all motorists and homeowners to pay an pay an annual 2% levy on their insurance premiums to raise further funds for the troubled group.