More than €740m compensation to be paid out of public fund
The sale of Quinn Insurance Ltd (QIL) to the Liberty Mutual/Anglo Irish Bank joint venture was put in jeopardy as a result of under-reporting of reserves by QIL’s employees.
Ireland’s High Court heard yesterday it was discovered in October that QIL’s reserves had been under-reported.
The deal looked set to collapse as the under-reporting of reserves represented a material change to the deal, reports breakingnews.ie
After discovering the under-reporting, the joint administrators, who took disciplinary action against those employees of QIL involved, renegotiated certain of the terms of the sale, including securing a larger tranche of public funds.
As part of the sale in late October, approximately €740m (£618m) of public money is to be paid out of the State’s Insurance Compensation Fund to the insurer, including an immediate payment of €320m to facilitate the sale.
Had the sale collapsed, more than €800m would have been required from the fund.
The application for the larger tranche payments was granted by Mr Justice Kearns yesterday.
QIL businesses, barring healthcare, in the Republic of Ireland have been transferred to US insurer Liberty Mutual. Liberty will be wholly responsible for the business.
State-owned Anglo – now the Irish Bank Resolution Corporation – will act in a loan recovery capacity.
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