MINISTER FOR Finance Brian Lenihan has expressed full confidence in Financial Regulator Matthew Elderfield.
Mr Lenihan said the regulator also had the full confidence and support of the Government in the action he had taken in relation to Quinn Insurance. "The regulator has the Government's full confidence and support in the various steps he has taken because he has to protect policy holders and the wider economy," the Minister told RTÉ's News At One.
“If there is an insufficient provision in a particular company, he has to take action,” he said.
The Minister said that while potential job losses at the Quinn Group were a “core concern” for the Government, “the regulator has to ensure that no one insurance company has an unfair advantage over another because it’s breaking the rules. Surely, we’ve learnt enough from this banking crisis to understand that,” he said.
Mr Lenihan said he would not seek to influence the regulator’s action in any way, insisting that “the perception that the regulator can be subject to political interference would be very bad for this country. His job is to ensure that this insurance company is properly capitalised,” he said.
Asked if he supported attempts by Anglo Irish Bank to take over the Quinn Group to secure repayment of the €2.8 billion it is owed by the Quinn family, Mr Lenihan said Anglo would not be doing its duty, as a bank owned by the taxpayer, if it did not explore these options.
He said much of the media commentary surrounding such a move was “pre-empting matters which have not yet been fully considered”.
He added: “If Anglo Irish Bank did take over an insurance company, there would have to be very satisfactory guarantees that the insurance company would be operated at arm’s length from the bank.”
A legal action to put Quinn Insurance into full administration has been postponed for a week after the firm filed a lengthy affidavit. The action was taken by Mr Elderfield following concerns that the insurer had fallen below the regulatory solvency levels on how much an insurer must hold in reserve to cover potential liabilities on policies.
Dublin Socialist MEP Joe Higgins has called for the nationalisation of the Quinn Group to protect the thousands of jobs under threat. “It is clear that Seán Quinn cannot be trusted with these jobs. The catastrophic losses suffered by Quinn follow its cavalier attempt to buy Anglo Irish Bank and what the regulator describes as management malpractice. Quinn is no victim in this, having pocketed a personal fortune over the years.”
He said the only way to safeguard all of the jobs was for the Quinn Group to be nationalised and brought under the control and management of the workers.