Lenihan backs regulator's move on Quinn Insurance

MINISTER FOR Finance Brian Lenihan strongly backed the Financial Regulator’s decision to appoint administrators to Quinn Insurance.

“I fully support the action of the regulator, and I commend him for the promptness with which he has dealt with this matter,” he said.

“It is essential that policyholders be reassured about the insurance company in question.”

Replying to special notice questions, Mr Lenihan said the appointment was made after the High Court was informed of the regulator’s concerns, including that the company had significantly breached its solvency ratios, its subsidiaries had entered a series of guarantee agreements which had reduced its assets by some €448 million, and it had failed to deliver a financial recovery plan meeting the regulator’s requirements aimed at restoring its financial health.

Mr Lenihan said the Government was taking very seriously the implications of the move on employment.

“We remain acutely conscious that, while economic activity continues to remain weak, it is imperative that we do nothing to further erode private sector employment,” he added.

Fine Gael’s Michael Noonan said he understood that Seán Quinn had said that the action taken by the regulator was “highly aggressive and unnecessary’’, and that it would endanger 5,500 jobs in Ireland unless reversed.

Mr Lenihan said he wanted to make it clear that the regulator was acting in the proper performance of his functions.

“That is what I and, I am sure, every member of this House would expect him to do,’’ he added.

“The regulator has to ensure in a regulated industry of this character that the industry is operated in a manner that can assure policyholders their claims will be met.’’

Mr Lenihan said it was the second occasion on which “a difficulty of this type’’ had emerged regarding the insurance company.

Whatever the House disagreed about relating to the banks, there was a particular onus on the regulator to ensure that a regulated industry met whatever statutory standards were laid down.

Mr Lenihan said the House must ensure that, in the eyes of the world, the insurance company was in a position to meet all regulatory requirements. “Clearly, the company has a large amount of business,’’ he added.