Dublin was misled on rescue bill for Quinn Insurance, court hears
An extraordinary dispute between the Republic’s Finance Minister and the administrators running Quinn Insurance has been revealed in an Irish court.
Details of the row emerged after the High Court in Dublin demanded information on how the cost of rescuing the company founded by Fermanagh businessman Sean Quinn could have spiralled to more than €1.65bn (£1.3bn).
In correspondence read out in court, Minister Michael Noonan demanded to know how highly-paid administrators, actuaries and auditors could have so badly underestimated the size of the “black hole” at Quinn Insurance.
He also said he was concerned that the Irish government had been “misled”.
When the insurer went into administration two years ago, the court was told that Quinn was able to pay its way without needing to raise money from insurance policyholders through the Insurance Compensation Fund (ICF), which protects policyholders by providing funds for the payment of claims following the insolvency of an insurer.
By last October, the administrators said more than €738m (£585m) could be needed — and last month that estimate rose to €1.65bn (£1.3bn), an escalation described as “truly shocking” by a High Court judge.
In a reply to the minister, the insurer's administrators said they “totally refute any suggestion” they misled the government.
They claim the increase to €1.65bn was “largely” because they had to include a new provision for foreign exchange losses.
Quinn Insurance gets all of its income in euro, from the ICF levy. It pays all of its costs in sterling, since it is dealing with claims from Quinn Insurance's UK and Northern Ireland business.