'Disappointment' as administrators appointed to Quinn Insurance

Ireland’s largest insurance firm was effectively in the control of the State today after the financial watchdog said it was gravely concerned about the company.

The High Court in Dublin appointed a provisional administrator to Quinn Insurance – owned by billionaire Sean Quinn – after an application by the Central Bank and the Financial Regulator.

The regulator said its officials are on the company floor overseeing the day-to-day business of Quinn Direct and Quinn Healthcare in the interests of policy holders.

In a statement, the regulator said it had launched an investigation into issues at Quinn Insurance which had recently come to light.

“The appointment of joint provisional administrators will better protect policy-holders,” the regulator said.

“It will allow the firm to remain open for business, to continue to be run as a going concern under different management and to put the business on a sound commercial and financial footing.”

The two main businesses affected by the court order are Quinn Healthcare and Quinn Direct, which offers motor, home and business policies.

It is understood the company’s solvency levels were being monitored before the regulator decided to move in.

Quinn will continue to trade as normal and will remain open for business.

Parent company the Quinn Group criticised the regulator's request for an administrator to be brought in.

“This is deeply disappointing in the context of the continued profitability of the group which is currently in excess of €20m per month,” the company said.

“However, the regulator has seen fit to take this action in the context of a perceived depreciation of the underlying assets of Quinn Insurance Limited.

“We feel that this issue could have been resolved to the benefit of all in a relatively short space of time and we will be working with the regulator and the provisional administrators to resolve all outstanding matters.”

Paul McCann and Michael McAteer of Grant Thornton have been appointed provisional administrators.

The company said they will take over management of Quinn Insurance as a going concern with a view to placing it on a sound financial and commercial footing.

“The customers of the company are unaffected by our appointment and all valid claims will be met by the company,” the administrators said.

The regulator said the Quinn Life business is a separate entity and unaffected by the court action.

Siobhan Gannon, Managing Director of Quinn Life said: “The savings and investments of the policyholders of Quinn Life are backed by the Quinn Life unit-linked funds, and in addition, Quinn Life holds the additional solvency margin required by the Financial Regulator. The Financial Regulator has not expressed any concern over the solvency of Quinn Life.”

The company also operates Quinn Insurance UK and the regulator has ordered this wing of the insurance giant to stop writing new business in the UK.

“Existing UK policyholders will not be affected by this decision as existing policies will remain valid. Customers can make claims in the normal way,” the regulator said.

“The effect of this action is to prevent Quinn Insurance Limited suffering further financial losses from its currently unprofitable UK business.”

Quinn Insurance employs almost 2,800 people in Ireland and the UK out of more than 8,000 workers in the wider Quinn Group across Europe.

Formed in 1973 by chairman Mr Quinn, its headquarters are in Derrylin, Co Fermanagh and the group is one of Ireland’s most successful companies.

It has diversified into cement and concrete products, container glass, general and health insurance, radiators, plastics, hospitality and real estate.

Local SDLP representative Tommy Gallagher said: “Obviously the first thought in everyone’s mind is whether there might be any implications for the wider Quinn Group, which employs a lot of people in Fermanagh and just over the border in Cavan and is a key player in the local economy.

“The Quinn family is held in very high regard in Fermanagh; in fact, they are local champions who have come far since they started out in the gravel business and yet retained the strongest links with the area.

“Everyone will want them to pull through this difficulty as soon as possible.”

Today's action is the second time Mr Quinn has clashed with regulatory authorities.

In October 2008 the unassuming family man was forced into a humiliating resignation and his flagship business hit with a record €3.25m fine after admitting financial blunders.

The Financial Regulator found Quinn Insurance paid loans worth €288m to other companies in the Fermanagh businessman’s multi-national empire.

The watchdog said officials suspected the firm breached requirements under the Insurance Acts and financial rules after failing to notify the regulator about the lending to various parts of the Quinn Group.

Quinn Insurance customers were not affected by the deals.

At the time Mr Quinn, who had invested heavily in complex Anglo-Irish Bank share deals months before its collapse, said he was very disappointed with the investment decisions which over-exposed some of his firms to stock market falls.

But the entrepreneur – also hit with a €200,000 personal penalty over the loan deals – hit out at the size of the fines imposed.

“While I accept that I made mistakes, I feel that the levels of fines do not reflect the fact that there was no risk to policyholders or the taxpayer but are a result of the pressures existing in the current environment,” he said in 2008.

“However, we will pay the fines and move on.”