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Federation seeks 'clarification' over collapsed insurer sale deal

The Irish Insurance Federation has asked the Republic's Finance Minister for "clarification" on the terms of the sale of Quinn Insurance.

It has warned of the "moral hazard" that could arise "if there is any suggestion that full value" was not received in the sale.

The IIF has also called on the Irish government to ensure that any levy imposed as a result of the collapse of Quinn Insurance is entirely offset by the removal of a 3% stamp duty on insurance policies.

The comments were made in a letter from IIF boss Mike Kemp to Finance Minister Michael Noonan and follow last week's news that Quinn Insurance's sale could leave a €700m (£629) black hole to be funded by an insurance levy.

Mr Kemp last night confirmed that he had written to the minister, seeking further details on the deal to sell the bulk of Quinn Insurance's operations to Anglo Irish Bank and US insurance giant Liberty Mutual.

"We want clarification on the terms of sale and plans for the future funding of the compensation fund, as consumers and insurers will be affected," Mr Kemp said. "We also emphasised the future moral-hazard implications if the full value has not been extracted from the sale."

Some observers believe the insurer was "milked" in the deal, that saw Anglo and other lenders take control of the Quinn Group.


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