Quinn investigation findings given to Financial Regulator, court told

The High Court has been informed that the joint administrators of Quinn Insurance have forwarded to the Financial Regulator the findings of their investigation into alleged breaches of insurance regulations which resulted in their appointment.

Today the administrators, in presenting their fourth report to the President of the High Court, Mr Justice Nicholas Kearns since the Financial Regulator put the insurer into administration in March, informed the court that the findings of their investigation have been given to the regulator, Mr Matthew Elderfield.

No details of what the administrators investigation were revealed to the court. It is now a matter for the regulator what steps, if any, to take in light of the report.

Bernard Dunleavy Bl, for administrators Michael McAteer and Paul McCann of Grant Thornton said that his clients are happy with the way that the administration process is progressing.

Counsel said that the administrators have been keeping a tight eye on the companies solvency ratios, and that Quinn will not have to avail of the Insurance Compensation Fund, the a fund set up by the Government to protect all policyholders in the event that an insurer cannot meet their liabilities.

Counsel added that process to sell insurance group has now entered its second stage, that Quinn's non-executive directors are to be replaced with independent directors and that Quinn's executive directors are to resign.

The administrators in their report to the court, elements of which are confidential for commercial reasons, further stated that more than 800 redundancies required from the workforce of 2010 will be achieved through voluntary redundancies and natural wastage.

Counsel added that the merchant bankers hired to help sell the group, Macquarie Capital Europe Ltd, had originally identified 90 prospective buyers for Quinn.

That number was reduced to 11 before the commencement earlier this month of the second phase of negotiations. Counsel said that for commercial reasons the number of parties involved in the second phase was not being disclosed publicly.

Among the confidential elements was a section of the report dealing with the solvency of the insurer, the number of prospective buyers involved in the second stage of the process to sell the insurer and when they process would be complete.

Counsel said that overall business in Ireland has improved and that Quinn's UK motor insurance business has also been going well. Counsel said that while the Regulator had stopped Quinn from underwriting commercial insurance in the UK, he had allowed them to continue to provide insurance to one single large unnamed client.

Counsel added that the administrators were able to successfully redeployed 46 employees who were involved in the commercial insurance business in the UK.

Mr Justice Kearns in receiving the report said that he was adjourning for one week an application for fees sought by the administrators and their lawyers.

The fees were based on similar payments for work done to date and the judge said that after being informed that things were progressing well said he expected fees to reduce as there was "less and less work".

Mr Justice Kearns said he was expressing his concerned because the fees in this case had been cited in other commercial hearings.

The Judge said that he wanted additional detailed information in an affidavit from the administrators before making any decision in regards to sanctioning the level of fees being sought.

Mr Dunleavy said that while the process was going well, disagreed that there was less work involved in the administration process. Counsel told the court there was "more and more work involved".

Counsel said that further evidence would be provided by his clients, added that the solicitors involved in the administration McCann Fitzgerald had agreed to a 5% reduction in fees.

The administrators previously secured approval of the costs of some €565,000 for their work between March 30, 2010 and April 30, 2010 and liberty to invoice the company monthly up to the end of July for fees for sums not exceeding €1.8m.

The court also permitted them pay their solicitors, McCann Fitzgerald, some €120,000 for work between March 30 and April 30 last and further legal costs incurred since then.