Lobby urges State to launch bond for €700m Quinn shortfall
Published 03/06/2010 | 05:00
A LOBBY group of companies that trades with the Quinn Group has called on the Government to launch a bond to bridge Quinn Insurance's €700m solvency shortfall.
The proposal was unveiled yesterday by the Concerned Irish Businesses (CIB) lobby, which represents close to 300 companies north and south of the Border.
The group has secured a meeting with Financial Regulator Matthew Elderfield on June 10 where they will present their full dossier on 'The Way Forward' for Quinn Insurance.
The silver bullet in the plan is a proposal that would see the Government solving the solvency issues that pushed Quinn Insurance Limited (QIL) into administration at the end of March.
The plan suggests the Government could bridge the solvency gap by issuing a bond, which would be repayable by QIL at normal interest rates.
Failing this, the Government could issue a "surety" to any commercial institution that would shore up Quinn's solvency base. The outline proposals include appointing a new board to the stricken insurer including three government representatives, three Quinn Group nominees and one Quinn family member.
"Our proposal offers the Irish Government an opportunity to do the right thing and thereby what is in the best interests of all concerned," spokesman John Maguire said.
Asked about the legality of the measures proposed, Mr Maguire admitted his group had taken "legal observations" but had not had formal legal advice. "We'd contend that it is legal," he added.
Politicians in attendance, however, said the proposed government solutions to Quinn's solvency issues had been considered before and were deemed to be at odds with European state aid rules. Insurance sources, meanwhile, expressed alarm at the prospect of the Government intervening on Quinn's behalf.
The plans have not yet been presented to Anglo Irish Bank, which is working on its own rescue plan for the Quinn Group, or to the insurance company's administrators.
Mr Maguire also confirmed his grouping had no backing from Quinn Group founder Sean Quinn and had not sought his views on their rescue plan.
"We've got a meeting with the regulator, though," Mr Maguire said.
A spokeswoman for the regulator last night stressed that any proposals were "a matter for the administrators".
"We cannot provide details on individual meetings," she added.