2% insurance levy to remain until 2037

Insurance policyholders look set to fork out for the failures of the Quinn empire until 2037, the Department of Finance has said.

A 2% levy was imposed on all non-life insurance policies in the State in an emergency move intended to cope with the collapse of the Quinn organisation, but despite generating €65m a year, it will take a quarter of a century to meet the liabilities, a spokes- person for Finance Minister Michael Noonan has confirmed.

The Insurance Compensation Fund levy was imposed to cover the expected cost of €1.65bn in meeting claims of Quinn Insurance Ltd (QIL) policyholders.

Fianna Fáil’s finance spokesperson Michael McGrath said: “It looks like it [the levy] could drag on for the next 20-25 years.

“I am critical of the way in which the sale of the business was handled.

“The Government failed to ensure there were sufficient safeguards for taxpayers.

“Taxpayers have been left on the hook for the losses,” he said.

The only hope for policyholders appears to be an ongoing legal case with the Quinn company.

The joint administrators of Quinn Insurance Ltd are currently suing the firm’s former auditors PriceWaterhouseCoopers for around €1bn over alleged negligent auditing of the company’s accounts over several years.

Any damages recovered in the case will be used to partly or fully repay the state-backed Insurance Compensation Fund the cost, which could reach €1.65bn, the administrators have said.

PwC has said it will “vigorously” challenge the claims made against it by the administrators.

The Department of Finance said it could not comment on the potential ramifications of the case for policyholders as the mater was still before the courts. Mr Noonan previously expressed concern at how earlier estimates of meeting the costs of QIL policyholders later rose considerably.