Is the Regulator right in its dealings with Quinn Insurance?

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papervalue

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on the rte website their is a 30 min interview with sean quinn. it is well worth a look. He came across quite well in it. Keep an eye on body lanuage at certain parts.

Personally I would support Sean quinn. Only connection I have to him is my car insurance.

The part I found strange was away from the financial detail is he contacted a number of gov ministers by phone and not one has returned his call- Out of good manners, he being a large employer, no excuse for not returning the mans call. They should be bending over backwards to protect jobs now.
 
papervalue said:
The part I found strange was away from the financial detail is he contacted a number of gov ministers by phone and not one has returned his call- Out of good manners, he being a large employer, no excuse for not returning the mans call. They should be bending over backwards to protect jobs now.
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I thought that was odd too. I understand they don't want to appear to be interfering with an independent regulator but there are other issues at stake here. On the opposite side, all the MLAs for Fermanagh showed up at the Group building within two days to show their support.
 
What I find extraordinary about Quinn's arguments and those of his Chief Executive is that he is saying that the Administration of the insurance company might bring down the entire group. Also, the FR was worried that the insurance company was dependent on the health of the entire group.

Insurance companies should have adequate reserves to stand independently.

Brendan
 
Brendan said:
Insurance companies should have adequate reserves to stand independently.
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You've hit the nail on the head but missed the wider picture. Of course QI should always have remained separate to the rest of the Quinn Group and the regulator should have insisted on it all the time. No-one is arguing with that (expect perhaps members of the Quinn company).

However, that's not the case and now the continued operation of the Quinn Group is threatened if Quinn Insurance is seized. Is it good for the country and economy if 5,500 people are put on the dole, several thousand more lose their jobs because of it and a large number of pubs, hotels and construction businesses are firesold? Does anyone seriously think that's a good outcome? It's not long since there was uproar over Dells decision to make 1,900 people redundant. Ministers flew to Texas, and the government went into overdrive in an effort to save the jobs. Now we're about to throw away more than twice that.

Surely a better situation is to force QG or their bankers to restore the solvency ratios and sit on the management of QI and QG for the next few years to ensure the situation doesn't reoccur. This means all the people hired by QG remain employed and there should be no cost to the exchequer.
 
Hi Mark

A Provisional Administrator has been appointed - there is no winding up order for the Quinn Group.

A "too big to fail" situation has been allowed to develop. It appears that QIL could be brought down by the other operations of the Quinn Group. Anglo could be severely damaged as well.

The right strategy is for the Regulator and government to take control wherever possible to protect the interests of the insured, the claimants and the taxpayer who is funding the group through Anglo.

I would not be happy for it to continue under the direction of Sean Quinn who has made some very bad decisions. He has apparently lost €3billion on Anglo. His company was fined €3m by the Regulator two years ago. I wouldn't have confidence in his ability to sort out the mess, no matter how much I admire his general business and entrepreneurial skills.
 
Ed - that really is a great piece of writing by John McManus.

Here are some extracts, but it's worth reading the entire piece.

Quinn should have no role in insurance group rescue



WATCHING SEÁN Quinn on the television news last Thursday, it seemed pretty obvious that someone needs to take him aside and explain a few things. The extent to which Quinn seems deluded is positively frightening. It is clear that he fundamentally does not understand the prudential bargain at the heart of the insurance business.

...
The first point to make here is that Quinn Insurance does not meet the solvency requirements set by the regulator and has a history of not doing so. ...


Mr Quinn’s decision to use the reserves of the insurance company to finance his disastrous foray into Anglo Irish Bank shares should have been sufficient grounds to seize the company in 2008, demonstrating as it did his blindness to the prudential fundamentals of insurance.




Over and above that, the whole – and as yet unexplained – thinking behind taking a secret 28 per cent stake in the country’s third-largest bank should, as a minimum, have shown an approach to investment at odds with running an insurance business. Never mind what it said about an attitude to corporate governance.


Seán Quinn is the architect of his own downfall and the sooner he realises the game is up as far as his adventure in the insurance industry the better.
At this stage it’s unclear which way things will go, but one thing is obvious: there should be no role for Seán Quinn in what happens.
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Brian Carey had a great short piece in the Sunday Times
Irony is so often lost on the strongminded and self-absorbed. Sean Quinn who lost €2.5billion on Anglo shares, last week said the new Financial Regulator had made "one of the biggest errors ever in the history of corporate Ireland". Sorry Sean, I think that was you.
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Brendan said:
Ed - that really is a great piece of writing by John McManus.

Here are some extracts, but it's worth reading the entire piece.
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He really gets to the nub of the matter.

I wonder how people would react if the regulator did nothing and subsequently Quinn went to the wall.

The regulator is there to protect us all and whilst the previous one manifestly failed to do that I at least have some confidence that the new one will do so.

I think for a lot of people it would be worth researching what happened to both ICI and PMPA.

Particulary in the case of PMPA the similarities between it and Quinn are stark.
 
Im an employee with Quinn Insurance and at the moment one of the major concerns is that the Regulator has put a stop on us writing new business in the UK (department in which i work) and we are hoping that this is revoked as soon as possible as its only going to make the situation worse!
 
How is that going to make it worse / The UK business is/was making a loss ?
 
Dont know where they got that info..it has been making a profit in recent times.
 
papervalue said:
Only connection I have to him is my car insurance.
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Yeah, and the regulator is looking after your interests as a customer i.e. if quinn can't pay all of its claims it shouldn't be let write business.

After all we've been through with the banks, anyone who thinks we should ride roughshod over the regulations is simply still not getting it.
 
UK business is making a loss as reported by the Fin Regulator in his submission to the High Court - difficult to imagine he made this claim without backup
 
The Regulator had to go to the High Court and make his case.

The High Court was sufficiently convinced of the case that was made and granted the order. So there is obviously something up.

What's interesting about him, Fingleton and Sean Fitzpatrick is that they all started out small and grew their businesses but all could not distinguish between themselves and the business.

The problem with the Quinn Group that it appears to be a bit of a mess of businesses - cement, hotels, insurance. And for insurance there are solvency rules.

Regulator did the right thing. We're just not used to seeing it being done!
 
jpd said:
UK business is making a loss as reported by the Fin Regulator in his submission to the High Court - difficult to imagine he made this claim without backup
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Estimating profits in an insurance company is very difficult. As the premiums are paid up front and the amount of the losses are not known for years.

At the end of the financial year, the company has to provide for future claims and this is a guessing exercize.

So it would be quite easy for one accountant to estimate that a company is profitable while another would estimate that it was loss making.

Brendan
 
crby said:
Im an employee with Quinn Insurance and at the moment one of the major concerns is that the Regulator has put a stop on us writing new business in the UK (department in which i work) and we are hoping that this is revoked as soon as possible as its only going to make the situation worse!
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I hope there is a positive outcome for you crby.
 
markpb said:
I thought that was odd too. I understand they don't want to appear to be interfering with an independent regulator but there are other issues at stake here. On the opposite side, all the MLAs for Fermanagh showed up at the Group building within two days to show their support.
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I'm baffled at this argument. Are you saying that politicians should be able to interfere in the process of the Financial Regulator? Are you saying that the problem with Ireland has been too much financial regulation?

Quinn employees might be better off marching to Sean Quinn's house to ask him why he broke insurance regulations and wasted money bankrolling Anglo.
 
An important point to remember about the Financial Regulator is that he is just that, the Financial Regulator, he is not the concrete maker regualtor or the hotel business regualtor. If the Quinn Group have themselves so intertwined that the failure of one part of it could bring down the whole group, that is not and should never be his concern.

Likewise, the employees are only one part that he has to concern himself with, he also has to concern himself with the integrity of the insurance market overall and the integrity of the Irish Financial system. We've spent the last 2 years giving out about the lack of regulation in Ireland and the mess with Anglo/INBS/AIB/NAMA etc and how much it is going to cost to put right. Perhaps if the new Reg had been there 5 years ago, much of what has happened may never have occured. He deserves praise for what he has done, not protests. Whilst I have sympathy for the staff concerned, their protests should be directed far closer to home.

Let's not forget that if Quinn Insurance goes bust, not only will people lose their jobs but anyone who pays insurance could find a levy on their insurance policies to pay off Quinn Insurance liaibilities. Yet again, the "golden circle" and the mess they have created may require the taxpayer to bail them out
 
canicemcavoy said:
Quinn employees might be better off marching to Sean Quinn's house to ask him why he broke insurance regulations and wasted money bankrolling Anglo.
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That's a great suggestion Canice. I hope someone picks up on it. And as Mpsox points out, the rest of us might be interested in joining that march if we have unpaid claims against Quinn or have to pay an insurance levy.

Brendan
 
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