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The answers that Quinn customers need to know

The appointment of administrators to Quinn Insurance is a serious worry to its customers. Are they still covered? Will they be able to renew their policies? Dan White examines the shock developments

Q: Are policyholders of Quinn Insurance still covered?

A: Yes. Financial Regulator Matthew Elderfield has gone out of his way to assure them that their policies remain in force.

Q: Will Quinn Insurance customers be able to renew their policies when they expire?

A: The answer again is yes. If you are a Quinn customer and your policy is coming up for renewal you will be able to renew it in the normal manner.

Q: Will Quinn Insurance customers be able to make claims?

A: Yes. If you wish to make a claim you should go about making the claim in the normal manner. The administrators are at pains to stress that claims will be processed as usual.

Q: What does the appointment of administrators actually mean?

A: In essence the Financial Regulator, who told the High Court that he had "serious concerns" about the company's management and finances, has seized control of Quinn Insurance. The administrators will now run Quinn Insurance on behalf of the Financial Regulator until the company is sold to another insurance company, something that could take from a few months to several years.

Q: Will its customers notice any difference?

A: Almost certainly not. In practice it is business as usual at Quinn Insurance for the foreseeable future with the company's staff now taking their orders from the administrators rather than the previous management.

Q: If a financial shortfall emerges at Quinn Insurance how will the deficit be made good?

A: When administrators were appointed to insurers PMPA and ICI in the mid-1980s large losses were quickly uncovered. The government of the day imposed a special levy on all insurance policies, not just those with PMPA and ICI, to plug the financial hole at these two companies. Expect something similar to happen this time.

Q: What parts of Quinn Insurance are affected by the appointment of administrators?

A: Administrators have been appointed to Quinn Direct, which writes motor and home insurance polices, and Quinn Healthcare, which competes with VHI in the health insurance market. Administrators have not been appointed to Quinn's life assurance business.

Q: What is the appointment of administrators to Quinn Insurance likely to mean for insurance prices?

A: Insurers generally do badly in recessionary times as customers claim for minors knocks and scratches that they would have let pass in the good times.

There is clear evidence that this is now happening, with all of the companies in Ireland warning that, due to rising claims costs, they would have to raise prices. The appointment of administrators to Quinn Insurance, traditionally one of the most aggressive companies in the market, is likely to reduce competition and push up prices even further.

Q: Should Quinn Insurance customers switch their policies to other insurers?

A: Only if they can get the same cover at a lower price. Quinn was one of the lowest-price providers in the market so its customers should be in no hurry.

Q: What does the appointment of administrators mean for the UK customers of Quinn Insurance?

A: The Financial Regulator has ordered Quinn Insurance to stop writing new business in the UK. This means that Quinn's customers in Northern Ireland and Britain will have to switch to another insurer when their polices come up for renewal.