Mr. Michael McAteer:

When we were appointed, approximately 2,600 people were employed by the Quinn Group. When the sale was completed, the figure was approximately 1,550. It is important to point out that the claims existed on the day on which we were appointed. The claims were always there. If we had not sold the company, the claims would still have had to be met. If it had not been sold and had gone out of business, we would have no company in place to process those claims and over 1,500 would have lost their jobs. In such circumstances, the amount of the claims would have been substantially greater than €1.65 billion because we would not have had the infrastructure in place to collect them. As stated previously, the figure of €1.65 billion comprises several numbers which may or may not be required to be used. What is important for the Department of Finance from a budgetary perspective is that those components are built in.

The company is not a normal trading company. That is one of the reasons why the actuaries and the auditors have requested that €300 million be set aside as an adverse deviation provision. This does not relate to a specific case within the Quinn Insurance caseload, it is a buffer to move the actuaries from a 50-50 review - which they would normally carry out on a trading basis - to 80-20 cover. That is a provision the actuaries have put in place in the sense that the company is in run-off.

We identified that hedging was required, we sought it and we expected to obtain it. Unfortunately, when we approached the banks in respect of it, they indicated that they required a letter of guarantee from the Minister for Finance. The Minister was not in a position to give such a letter and we do not have a hedging facility as a result. It would be irresponsible for us to predict whether sterling would go up or down. The figures were, therefore, calculated on the basis of a spot rate. We disclosed to the court that the number was based on a €1 to £0.83 exchange rate and was exposed to currency fluctuations. The €215 million is based on an exchange rate of €1 to £0.70. Luckily, sterling has weakened since our appearance before the courts in August. As a result, we may not require the full €215 million. Some €515 million of the €1.65 billion relates to provisions which may or may not be required.