REACTION:FINANCIAL REGULATOR Matthew Elderfield last night defended the decision to move "swiftly" to put Quinn Insurance into provisional administration.
“Last Wednesday, we received significant news that showed that the financial position of the company was overstated by about €450 million,” he said, speaking at a press conference on the new level of reserves to be required of Ireland’s troubled banking sector.
“In light of this information, we acted swiftly and asked that the company be put into administration. We believe that is in the best interests of policyholders to do that.”
Mr Elderfield said the regulator had, for months, “been having increasingly serious concerns about the financial position of Quinn Insurance, and we’ve been pressing very hard for a capital injection into the company”.
He said he was hopeful a solution could be found for the company “going forward”.
Speaking at a meeting of the Oireachtas Health Committee where the appointment of two joint provisional administrators to Quinn Insurance Ltd was raised, Minister for Health Mary Harney said there was “no immediate concern” in relation to Quinn’s health insurance business. She said Quinn held 23 per cent of the State’s health insurance market and all policyholders would continue to be covered. She stressed all claims would also be honoured.
Insurance brokers said they had received numerous calls from worried policyholders after the news broke. “Our brokers have been inundated with inquiries from clients. Some are worried about claim payments, while others are concerned about whether or not to renew with Quinn,” Ciarán Phelan, chief executive of the Irish Brokers’ Association (IBA), said.
He said Quinn customers should contact their brokers for information. “IBA brokers are also willing to help those policyholders who presently deal directly with Quinn Insurance,” he added.
IBA president Paul Carty said: “We welcome the action of the Financial Regulator to deal decisively with any problems that they have unearthed, and we welcome the reassurance given by the administrator that all valid claims will be paid. This is an important comfort for customers.”
Mr Elderfield said the events of 2008, when Quinn Insurance was fined a record €3.25 million for breach of regulatory requirements and Mr Quinn forced to resign as chairman, pre-dated his appointment as Financial Regulator. He said any decision to sell all or part of Quinn Insurance would be a matter for the administrators.
“The administrator will be managing the company in the best interests of the policyholders, and I think there’s a reasonable prospect that the administrator will look to put it up for sale.”
Mr Elderfield said stronger powers were needed for the regulator, “in particular fitness and probity standards to allow the ability to bar individuals from taking part in the financial services industry and an increase in our fines”.