New levy rule would have made Quinn ineligibile for bailout
COLLAPSED Quinn Insurance would have been ineligible for its €700m bailout from Irish policyholders if new legislation that passed through the Dail last night had been in place with the insurer ran aground.
The news comes as fresh figures from the Department of Finance show the Government could have to pump as much as €280m into the compensation fund this year, though it will get the cash back in a 2pc levy.
The levy legislation shows the Government is changing the Insurance Compensation Fund so it can only be used by those who did more than 70pc of their business in the Irish market in the last three years.
Quinn Insurance's annual filings show just 61pc of its earned premiums came from the Republic over the three years prior to its descent into administration in early 2010.
This means the insurer would have been ineligible for some €720m -- money that will overwhelmingly be used to pay insurance claims in the UK and Europe.
Even though the Insurance Compensation Fund is being used to fund Quinn's international business, it is being levied solely on Irish business rather than international business written by Irish registered insurers.
The Department of Finance stressed the new legislation meant the scheme would not cover "insured risk in the State" rather than "the risks of policyholders from Irish authorised companies".
The document also reveals that the Insurance Compensation Fund could need as much as €280m by the end of the year, "most" of which will need to be advanced by the State.