Could the Irish government’s Quinn deal catch the eye of European regulators, asks Ellen Bennett
Why is it always the innocent parties that get stuck picking up the tab? This morning’s report that Irish consumers face a 1%-2% levy on all motor and home policies to pay for the failure of Quinn Insurance is an all too familiar tale. The Irish government is planning the levy to pump funds into the Insurance Compensation Fund, which will pay out to Quinn policyholders who make valid claims. The equivalent on this side of the Irish Sea is the Financial Services Compensation Fund, where brokers, also innocent parties, are being pumped to pay for the mis-selling of PPI by banks and credit brokers.
Too big to fail?
The Irish government decided that Quinn is ‘too big to fail’ – to the point where it was willing to step into the negotiations with Anglo Irish Bank and US insurer Liberty Mutual, which have purchased the failed insurer on the condition that they do not have to take on all its losses.
Instead, these are being guaranteed by the government and, ultimately though the levy, all Irish home and motor policyholders.
An unfair advantage
What madness. Why should Anglo Irish and Liberty Mutual be allowed to pick up the benefits of a business without its legacy? This gives them an unfair advantage over their competitors in the Irish marketplace, at the expense of Irish policyholders.
Again, there are familiar themes here. RBS also had government help, and was consequently ordered to divest its insurance business by the European Commission. Perhaps Brussels might want to cast an eye over events at Quinn?
AXA takes shape
Meanwhile, the high-profile departures continue at AXA in the wake of commercial boss Amanda Blanc’s appointment. As we report, the latest to go are distribution director Keith Hector and head of specialist markets Mike Phillips. Expect further departures to be announced as Blanc’s new structure takes form.
