Is the Regulator right in its dealings with Quinn Insurance?

Do the people who are out protesting about this not realise that the reason the Administrator has been put in place is because the company does not have enough unburdened reserves to cover potential claims? In laymans terms, this company more than likely would have gone bust at some stage with the loss of all jobs if it had continued down the path that the Administrator is putting a halt to. The Administrator is protecting the jobs of the employees and the interests of those who have insurance policies. In my opinion, the best option would be for the Administrator to force the company to be sold - if it is profitable in its own right (which the media has suggested), then it would be better off being independent of the rest of the Quinn empire. And with Quinns links to Anglo and his heavy dependency on the construction business, I would have little confidence his ability to raise the funds to restore the insurance companies reserves. I think there is a real risk that a failure elsewhere in the empire could bring down an otherwise profitable business.

Another point - where have all these idiots who are out protesting been for the past couple of years? Dont they realise that the political cronyism that they are advocating is the reason the whole country is in a mess? They want a situation whereby local parish pump politicians allow companies to break financial rules?
 
All makes sense in a normal world but the issue is the €2.8 billion that Quinn owes Anglo a.k.a. the taxpayer. The regulator doesn't care about that but it is not in the taxpayers interest to see Quinn insurance sold off now.

Having said all that, the regulator will have my full support in whatever he decides. Amazing the difference an outsider can bring to the game.
 
Hi Sunny

I would say that the FR is very concerned about the implications of problems in Quinn Insurance Ltd for Anglo. You can be quite sure that we now have joined up thinking in the FR. They will be acutely conscious that selling off Quinn in a firesale could cost Anglo aka the taxpayer €3bn. I would think that he will look at the big picture.

But he won't be deterred by ill-informed protests and poitical pressure, such as it is.

Brendan
 
Slightly off topic, but didn't Sean Quinn share out many millions of euro to his children last year.
Probably all legal, but he obviously suspected something like this was coming down the tracks and was making sure they were looked after.
 
Brendan said:
Hi Sunny

I would say that the FR is very concerned about the implications of problems in Quinn Insurance Ltd for Anglo. You can be quite sure that we now have joined up thinking in the FR. They will be acutely conscious that selling off Quinn in a firesale could cost Anglo aka the taxpayer €3bn. I would think that he will look at the big picture.

But he won't be deterred by ill-informed protests and poitical pressure, such as it is.

Brendan
Click to expand...

I would hope so Brendan but if the Irish Times is to believed he isn't too impressed by Anglo's attempts to come up with a solution for whatever reason. I reckon the taxpayer will end up owning a bank and an insurance company soon enough though!
 
csirl said:
Another point - where have all these idiots who are out protesting been for the past couple of years?
Click to expand...

Nice..

I think the "idiots" you are referring to are those desperately trying to save their jobs in an area that has no alternative employment.
 
I think the Quinn situation hasn't been put into perspective in much of the coverage recently. I understand the the FR's actions are a major concern for anyone employed by Quinn or who have any of his businesses as a customer. I also admire his entrepreneurship over the year. However, insurance is a regulated industry and if you chose to go into such a business you have to abide by the rules.

Last year Quinn insurance was fined for giving loans to non-insurance businesses within the Quinn group in order to buy Anglo shares. However, despite this breach it then went on to guarantee loans for other Quinn group companies (presumably creating off balance sheet liabilities that would reduce regulatory capital level). The guarantees are one thing, but the failure to openly disclose them to the regulator and factor them into its solvency calculations was mismanagement, a lack of controls or plain evasive.

Insurance businesses are regulated to protect policyholders and at this time Irish insurers have had the worst weather related claims in memory (winter 09/10 weather related losses are said to be as large as weather related losses for the previous decade) which would already be putting stresses on solvency (I'm not suggesting there are problems at any other insurers, but these losses are why we are seeing prices rising as insurers need to enhance reserves). Obviously we are all aware of the financial climate currently, and if it were not an insurance company owned by an Irish entrepreneur I don't think anyone would have any issue with the regulator doing what he needs to do - show that consistently putting policyholders at risk for the sake of other group companies is not acceptable. Bad timing on Quinns part given the current climate!

With Quinn being one of the (if not the) largest insurers in Ireland and at a time when prices are rising, there will be plenty of interest in the company (although some companies would be limited by their large share in the Irish market already), so it is not a case that jobs will definitely be lost.
 
Have a look at the editorial in today's Irish Times.

John McManus really got it right on Monday and this nailed it today.

Here is one extract.

Mr Elderfield has been painted as the bad guy in all of this, jeopardising more than 5,000 jobs through unnecessary and precipitate action and by making one of the worst blunders in Irish corporate history. The reality is very different. The regulator has acted to protect consumer interests. Seán Quinn has been the architect of his own difficulties. It was his irresponsible behaviour and a series of disastrous investments that brought the Quinn Group to the brink of ruin. His actions echoed those of some other high-flyers who have since left the jurisdiction. But Mr Quinn fights on, invoking Cabinet, party political and local support in an attempt to retain control of the companies he built up.
It is the statutory duty of a financial regulator to monitor the soundness of individual institutions and to protect consumer interests. In doing that, he relies on co-operation from the companies concerned. But Quinn Insurance failed to notify the regulator about certain loan guarantees that had effectively wiped out its solvency cushion. It reflected a cavalier approach to corporate affairs that should be confined to the past. The discovery effectively led to a High Court application and the appointment of administrators.
 
If Quinn is correct in saying that 100m-150m would resolve his solvency issues, is the simple solution not staring us all in the face? Ask his children to give back the 100m. he is reputed to have given them a couple of months ago. When someone owes billions, they cannot afford to give away millions to anyone. That goes for Anglo also. And why are his children not rushing to offer the money back to their father in his hour of need?
Makes one wonder...
 
Attica said:
Ask his children to give back the 100m. he is reputed to have given them a couple of months ago.
Click to expand...

IIRC he's ignoring the inter-company loans when saying the company is only short €100m. In any event, I doubt the money he gave them was cash, it was more likely to be shares in the Quinn Group or shares in other companies he had invested in. In either case, they're probably worth an awful lot less now.
 
You must log in or register to reply here.
Back
Top