Business Irish

Thursday 22 March 2018

Regulator's case versus Quinn's defence

Laura Noonan

Laura Noonan

If Anglo and the Financial Regulator don't have a meeting of the minds over the weekend, the fate of Quinn Insurance will be decided at a court hearing on Monday morning.

Financial Regulator:

The regulator will be pushing for Quinn Insurance to move from "provisional" administration to "full" administration. To achieve this, he will have to convince the court that at least one of the following four tests is true:

  • The insurance company has failed to "make adequate provision for its debts, including contingent and prospective liabilities".
  • The way the business is being run jeopardises or prejudices the rights and interests of policyholders.
  • The insurer has become unable to comply with the requirements of the regulations in a material respect.
  • Full administration would assist in the maintenance "of the proper and orderly regulation and conduct of non-life insurance business".

What it means:

The regulator only has to make good on one of the first three, but he argued that all four tests had been made in his initial affidavit and it is understood the regulator has gathered more supporting information since then.

Crucially, the Insurance Act says the regulator can bring forward an administration petition even if there is "another remedy or course of action available to him".

So even if there is a viable rescue plan on the table from the Quinn Group or anyone else, the Regulator can still legally push ahead.

The Quinn Group

The Quinn Group will be pushing for Quinn Insurance to be taken out of administration. To achieve this, they'll have to convince the Regulator that all four of the conditions below have been met:

  • The business must "make adequate provision for its debts, including contingent and prospective liabilities".
  • The business won't jeopardise or prejudice the rights and interests of persons arising under policies issued by the insurer.
  • The business of the insurer is and will continue to be "on a sound commercial and financial footing".
  • It would be "unjust and inequitable" not to release the firm from administration.

What it means:

Sean Quinn has insisted his group's financial position isn't as bad as the Financial Regulator maintains, but he has to prove its soundness under the three separate headings above.

He also has to prove it would be "unfair or unjust" not to release the firm, a point he's been making repeatedly since the administration process has begun.

Irish Independent

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