Noonan asked by bidders to use compensation fund for Quinn deal
Published 15/03/2011 | 05:00
Three proposals for the purchase of Quinn Insurance have now been submitted to Finance Minister Michael Noonan -- with all of them requiring some use of the Insurance Compensation Fund.
The administrators running Quinn Insurance, Grant Thornton, have requested a meeting with Mr Noonan who has the final say on which structure the deal will be based on.
Three options on the future of Quinn have been finalised by the administrators. It is understood these options would involve Quinn's legacy claims being absorbed by the country's insurance compensation fund.
It is understood the bidders want to effectively 'scoop' a new company out of Quinn Insurance, rather than continue operations under the current arrangements.
This new company would avoid the buyer having to take on any long-standing Quinn Insurance claims.
The remaining claims would be managed within Quinn Insurance Limited, which could then be funded by the Insurance Compensation Fund if needed.
If these options are to be considered then the Department of Finance and Mr Noonan will have to sign off on whatever proposal emerges.
Bidders include Anglo Irish Bank/Liberty Mutual and Zurich.
Other insurance players are likely to strongly object to the use of the fund, which is funded via a levy on all non-life insurance insurance premiums. The fund was set up after PMPA collapsed in the early 1980s.
It is understood media revelations earlier this year concerning Anglo Irish Bank and Sean Quinn have damaged the Quinn Insurance brand with some consumers.
It is also felt that for big stragetic decisions to be made a new owner for Quinn is needed urgently. The administration, while effective in stabilising the company, is ultimately a curb on its growth.
The low penetration of Qunn Insurance in the Dublin market in particular is something the new owners will want to change. All the bidders are on stand-by for Mr Noonan's decision, but Zurich is seen very much as an outsider at this stage.