Consumers face l5-year levy to cover cost of Quinn fiasco
Published 11/10/2012 | 05:00
THE joint administrators appointed to Quinn Insurance have staunchly defended their actions as it emerged that consumers face levies of 15 years to cover the cost of the collapsed empire.
The High Court had been told in August that taxpayers would be hit with a higher than expected bill of €1.65bn to cover losses at the scandal-hit insurer.
The Department of Finance confirmed yesterday to the Oireachtas Finance Committee that it expected at a "best estimate" that the call on the State's insurance compensation fund would be €1.1bn, requiring a 2pc levy on all home, motor and commercial insurance policies for 15 years.
And Central Bank's insurance supervision chief Domhnall Cullinan, who said they had been under-resourced prior to Quinn's collapse, suggested the final figure could be higher.
Fianna Fail's finance spokesman Michael McGrath estimated that policyholders would have to pay the levy for 25 years to meet the €1.65bn figure.
Amid criticism from Finance Minister Michael Noonan over the higher-than expected deficit, Michael McAteer of accountants Grant Thornton said their initial estimate was based on figures provided to them in 2009.
"The administrators share the dismay of all Irish citizens that the current estimate of the deficit in the insurance compensation fund has risen to €1.65bn," he said.
"It is important to point out that while it took approximately 18 months from the date of our appointment to uncover the €1.65bn deficit level, this deficit always existed and no actions or indeed lack of actions by the administrators have contributed to this number."
Mr McAteer also said the final bill will not be known for a number of years.
He also revealed that fees paid to the administrators have amounted to just over €14m since 2010, although this includes almost €6m paid in the UK for actuarial services in respect of Quinn.
Amid questioning from TDs who demanded an apology for not highlighting the extent of the losses sooner, Mr McAteer said the State could have faced even more losses with 1,500 people out of work had they not found a buyer for Quinn.
The levy being imposed on policy holders has echoes of the 1983 insolvency of Irish motor insurance company, Private Motorists Protection Association (PMPA).
A 2pc levy was imposed on all non-life insurance premiums at the time to cover the collapse of PMPA, ending in the early 1990s.
Mr McAteer also revealed that the Quinn family had extracted about €200m from the QIL balance sheet "by way of gifts".
About €135m was paid to Quinn family property group, and the remaining amount to a Quinn subsidiary.