Two former Quinn Insurance executives launch High Court proceedings
TWO former executives with Quinn Insurance Limited (QIL) have launched High Court proceedings aimed at preventing the Central Bank from inquiring into suspected contraventions of insurance regulations by former company management.
QIL was placed into administration in 2010.
The action has been brought Liam McCaffrey and Kevin Lunny arising out of the Central Bank's decision to hold an inquiry “to establish whether the persons who were concerned in the management of QIL participated in the above mentioned suspected prescribed contravention.”
They claim the inquiry breaches their constitutional rights. As a result they have both brought judicial review proceedings against the Central Bank, Ireland and the Attorney General, aimed at halting the inquiry, which is due to start in April.
Micheal P O'Higgins SC for Mr Lunney and Mr McCaffrey told the court the challenge has been brought against the inquiry on the grounds
including delay, bias, and that the matter has been prejudged.
Counsel said the inquiry also breaches the former executive's rights to a fair process. They further claim the inquiry is unconstitutional.
They seek orders including an injunction to put in place until his constitutional challenge against the inquiry, brought under under Part III C of the 1942 Central Bank Act, has been determined by the High Court.
It is claimed the Central Bank inquiry will act in a manner that is expressly reserved for the courts, which they argue is unconstitutional.
Counsel said the inquiry will have powers to impose "quite far reaching" sanctions including a fine of up to €500,000 or disqualifying a person from having a role in the management of a regulated service provider on any person whom it makes adverse findings against.
Permission to bring the the action, by way of judicial review, was granted on an ex-parte basis by Mr Justice Richard Humphreys on Monday evening. The Judge made the matter returnable to later this week.
The Central Bank announced last November it was establishing an inquiry after it conducted an investigation under its administrative sanctions procedure.
It determined there was “reasonable grounds to suspect that “ certain persons who were concerned in the management of Quinn Insurance participated in the commission of a suspected prescribed contravention of EU non-life insurance regulations.
In 2013 the Central Bank fined Quinn Insurance €5m in relation to a finding that it had failed between October 2005 and March 2010 to maintain adequate solvency margins and had insufficient internal control mechanisms. The fine was waived because the firm was in administration.
The fine followed the discovery of a massive financial hole in the firm’s accounts partly related to guarantees given to other parts of the former business empire of businessman Sean Quinn. A levy was placed on all insurance policies to fund the shortfall following the collapse of the company.
The Quinn Insurance business was subsequently taken over by Liberty Insurance.