UK's watchdog raised concerns over Quinn
Published 08/04/2010 | 05:00
THE British financial watchdog raised concerns about Quinn Insurance's UK business model with the Irish regulator as far back as last year, the Irish Independent has learned.
The UK's Financial Services Authority (FSA) has no supervisory role over Quinn Insurance as it is an Irish-registered company.
But it is understood the concerns were prompted by other insurance firms operating in that market.
Last week newly appointed Financial Regulator Matthew Elderfield slapped a ban on Quinn Insurance taking on new business in Britain arising out of concerns about financial losses being generated there by the company.
The regulator also appointed two provisional administrators to run the firm after it found a €488m hole in its finances. It also discovered Quinn Insurance had been used to give guarantees on the debts of the wider Quinn Group.
The Financial Regulator would not comment on the FSA concerns yesterday, but said it would maintain contact with other supervisory authorities.
Lenders owed billions by the group were last night also continuing with efforts to salvage some value from the company founded by Sean Quinn.
The discussions involve eight separate banks, led by state-owned Anglo Irish Bank, which is owed €2.8bn, and 20 separate bondholders, led by UK bank Barclays.
Several of the parties are understood to have been in contact with both the Financial Regulator and the Department of Finance in recent days to sound them out regarding possible solutions.
One of the options would involve an Anglo-led group taking temporary ownership and control of Quinn, getting the company into shape and then selling it off to a third party.
Executives at Quinn Insurance are also working on a new business plan that would involve the lifting of the ban on new UK business.
However, political sources last night said this is an unlikely outcome as the regulator had already made its decision.
Workers in the wider Quinn Group, which employs 5,500 people in Ireland, have also been lobbying for business in the UK to resume as they continued their protests against the regulator's decision.
"As a direct result of our work, the administrator is currently reassessing the NI (Northern Ireland)/UK business plan which contains supporting information for the lifting of the NI/UK ban," employees said in a statement.
"The administrator will be sending this information to the Regulator in the next 24 hours.
"Therefore, should the Regulator act with the same urgency that he did last Tuesday on receipt and examination of the information, Quinn Insurance should be open for trading in the NI/UK by Friday morning."
Quinn employees held another rally in Co Cavan last night organised by the local Chamber of Commerce.
The staff also warned they would follow that with a mass demonstration outside Mr Elderfield's office in Dublin tomorrow, when he is expected to receive the administrators' report on the viability of its insurance services.
The UK business was one of the issues raised at a number of meetings yesterday on the future of the Quinn Group, which included Finance Minister Brian Lenihan and cross-party, local politicians.