Policyholders to foot Quinn bill for 15 more years
Administrators to Quinn Insurance are expected to advise the High Court today that the cost of the administration will reach between €1.1bn and €1.2bn.
This is far higher than the €738m envisaged by Michael Noonan, the finance minister, when he announced a 2% levy on policies offered by all insurers for the next 12 years. The levy was to replenish the Insurance Compensation Fund, which will be tapped into by administrators to pay any outstanding claims or other items associated with the administration.
The higher-than-expected administration costs means the 2% levy is likely to remain in place for at least 15 more years.
Fianna Fáil’s spokesperson on Finance, Michael McGrath, said the fallout from the collapse of the Quinn business empire “is not a victimless episode”. “The insurance levy that will be applied to ordinary insurance policyholders for the next decade and a half or more is a further stark reminder of that,” he said.
The Insurance (Amendment) Act 2011 was passed in the Dáil last September to allow for the 2% levy. It took effect on Jan 1.
It will raise €65m a year for the Insurance Compensation Fund which was set up in 1964 to protect policyholders in the event of their insurer collapsing.
“During the Dáil debate, I pointed out to the minister that, by not including a sunset clause in the legislation, the Government was giving an open-ended commitment and that, despite the Government referring to it as a levy on the insurance industry, ordinary insurance policyholders would have to pick up the bill,” said Mr McGrath.
Meanwhile, the appeal by Seán Quinn Jr over being jailed for contempt of court orders restraining steps to put multi-million property assets beyond the reach of the former Anglo Irish Bank, will be heard by the Supreme Court in October.
Unless the High Court finds Mr Quinn has purged his contempt before the appeal hearing, it now appears he will remain in prison until at least October.
A warrant remains for the arrest of his cousin, Peter Darragh Quinn, who did not attend a High Court hearing last Friday where orders were made by Ms Justice Elizabeth Dunne jailing both men.
The orders followed her finding that Seán Quinn Jr, his father and Peter Darragh Quinn had failed to adequately comply with a series of coercive orders aimed at unwinding the scheme to strip assets valued at up to €500m from the Quinn family’s international property group.
The orders were sought by Irish Bank Resolution Corporation, formerly Anglo, which claims it is owed €2.8bn arising from unpaid loans made to various Quinn companies.
In the High Court yesterday, Mr Justice Michael Moriarty made directions for the discovery of documents for the Commercial Court action by Mrs Patricia Quinn and her five children in which they claim they are not liable for €2.35bn of the loans made to Quinn companies due to alleged illegal conduct by the bank in advancing those loans to support its share price. IBRC denies those claims. It has been returned for further mention in October.
