The joint administrators of Quinn Insurance have given the Financial Regulator the findings of their investigation into alleged breaches of insurance regulations which resulted in their appointment earlier this year, the High Court was told today.
The administrators, in presenting their fourth report to the President of the High Court, Mr Justice Nicholas Kearns, said they had given the findings of their investigation to the Financial Regulator, Matthew Elderfield, who had placed the insurer into administration last March.
No details of the investigation or findings were revealed to the court and the regulator will now decide what steps, if any, to take in light of the report.
Bernard Dunleavy, for administrators Michael McAteer and Paul McCann of Grant Thornton, said they were happy with the way the administration process is progressing.
Counsel said the administrators have been keeping a tight eye on the companies solvency ratios and Quinn Insurance would not have to avail of the Insurance Compensation Fund, a fund set up by the Government to protect policyholders in the event an insurer cannot meet its liabilities.
The administrators report, parts of which are confidential for commercial reasons including sections dealing with solvency, also stated more than 800 redundancies required from the workforce of 2010 will be achieved through voluntary redundancies and natural wastage, counsel said.
The process to sell the insurance group had entered its second stage, Quinn’s non-executive directors are to be replaced with independent directors and Quinn’s executive directors are to resign, counsel added.
The merchant bankers hired to help sell the group, Macquarie Capital Europe Ltd, had originally identified 90 prospective buyers for Quinn, the court also heard.
That number was reduced to 11 before the commencement earlier this month of the second phase of negotiations, Mr Dunleavy said. For commercial reasons, the number of parties involved in the second phase was not being disclosed publicly, he added.
Counsel also said the overall business in Ireland has improved and Quinn’s UK motor insurance business has also been going well. While the regulator had stopped Quinn underwriting commercial insurance in the UK, he had allowed them to continue to provide insurance to a single large unnamed client.
The administrators had also successfully redeployed 46 employees involved in the commercial insurance business in the UK.
Mr Justice Kearns received the report and adjourned for a 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, having been told things were progressing well, he expected fees to reduce as there was “less and less work”.
Mr Justice Kearns said he was expressing his concern because the fees in this case had been cited in other commercial hearings. He wanted additional information from the affidavit before making any decision about sanctioning the level of fees sought.
While the process was going well, Mr Dunleavy said he disagreed there was less work involved in the administration process. There was “more and more work involved”, he said. Further evidence to that effect would be provided by his clients.
Mr Dunleavy also said the solicitors involved in the administration, McCann Fitzgerald, had agreed to a 5 per cent reduction in fees.
The administrators previously secured approval of costs of some €565,000 for their work between March 30th 2010 and April 30th 2010 and liberty to invoice the company monthly up to the end of July for fees for sums not exceeding €1.8 million.
The court also permitted payment of their solicitors for some €120,000 for work between March 30th and April 30th last and further legal costs incurred since.