Regulator to decide shortly whether to take legal action against executives
The Financial Regulator is expected to complete an investigation into how Quinn Insurance was run by late next week. Several ring folders of evidence have been gathered by the regulator's enforcement section and the next key development is whether legal action is taken or not against key Quinn Insurance executives.
The evidence gathered solely concerns the guarantees given by subsidiaries of Quinn Insurance to debts accumulated by the Quinn Group. The giving of these guarantees, according to the regulator, significantly worsened the solvency position of Quinn Insurance at a vital time. This may or may not be the case, but what is of most interest is whether these guarantees were disclosed in the legally required way or not.
The regulator's affidavit concerning Quinn Insurance, filed in March, claims the guarantees were not disclosed to the regulator in routine quarterly filings. But the Quinn Group has contested and claims the guarantees were referred to in accounts filed by these subsidiaries. It claims there was no attempt to hide them and they were never going to be called on anyway.
The Insurance Act 1989 requires regulated insurance companies to disclose a range of information. What is crucial for Quinn executives and the regulator is whether the guarantees were properly disclosed as per the provisions of the act.
The regulator's trawl into the issue has been extensive. But ultimately what the investigators want to know is -- why were the guarantees given? When were they given? Who gave them and authorised them?
It is understood the auditors to the Quinn Group, PricewaterhouseCoopers, are also helping to assist the regulator's investigations. The ring folders of evidence are believed to include material taken from Quinn Insurance's headquarters in Cavan, but also correspondence and returns sent to the regulator over recent years.
The Gardai and the Office of the Director of Corporate Enforcement are believed to be aware of the progress of the investigation. But no charges have been brought and they may never be brought. One source said it was all down to the precise interpretation of disclosure rules in the insurance industry.
Earlier talk about corporate governance controls being loose at the company seem to have receded. Quinn is not being investigated for anything except the disclosure and timing of the guarantees.