Shane Ross (Dublin South, Independent)

I worry about this Bill while understanding why the Government feels the need to introduce it because its back is to the wall. I agree with much of what was said by Deputy Broughan and Deputy Boyd Barrett. This is not the first time such a situation has occurred. I worry about the compensation culture which compensates businesses which run into trouble and are bailed out by the Government because they are so big. It seems that over a period of nearly 30 years, we have learned nothing about regulating our financial industry, our banks and other industries which have grown very large.

Deputy Broughan mentioned the PMPA. Just prior to the PMPA collapse, in the case of another insurance company, Insurance Corporation of Ireland, one man went a bit berserk and started selling extremely risky products, mostly overseas. Not only did he nearly bring down Insurance Corporation of Ireland, he nearly brought down AIB. It was similar to the recent situation in various financial crises. An overnight decision was made and three members of the then coalition Government - former Ministers John Bruton and Alan Dukes and former Taoiseach Garret FitzGerald - decided they would have to rescue Insurance Corporation of Ireland and also AIB.

The result of this decision was that the Government guaranteed the future of AIB and in the process, no jobs were lost in AIB. One person in Insurance Corporation of Ireland did not retain his job but the rest of the banking and insurance systems carried on as if nothing had happened. A levy was imposed upon the poor unfortunate taxpayers and this was bad enough. Some people who were insiders made a lot of money by buying shares in AIB and this is well documented. Once they were guaranteed, they made a lot of money out of it. It was a shameful episode.

The PMPA followed about two years later. This was a massive insurance company which dealt mostly in motor insurance. It had been built up in a completely unregulated manner. The dogs in the street knew that the person in charge, Mr. Joe Moore, was very well connected with Mr. Charles J. Haughey and it was believed that he was protected and encouraged by people in Fianna Fáil and as a result of some political connivance, the company was not properly regulated. The PMPA went bust for an enormous amount of money and we are still paying for that many years later. There followed the saga of Larry Goodman, who was very powerful. The State provided him with export credit insurance. It was a slightly different type of product but again he was allowed to continue to trade recklessly with implicit Government guarantees and he eventually went under.

As in all these other cases, special legislation was required. If I remember correctly, the Dáil and Seanad were recalled from the summer recess in order to deal with the Larry Goodman case and to allow for the Goodman group to be put under the protection of examinership. The most recent examples are Anglo Irish Bank, which was not allowed to fail, and now the situation with Quinn Insurance, another insurance debacle. How in the name of God did all these things happen within the past 30 years as they are all very similar? Nobody seems to have learned the lessons of the banking boom, particularly the lack of regulation in the insurance industry, which should have been the first lesson.

There is a kind of pattern to these events. In nearly all cases, these industries or companies are one-man bands. The PMPA was basically dominated by Joe Moore and the Moore family. The Goodman group was obviously dominated by one man. The Anglo Irish Bank collapse was certainly dominated by one man. The Quinn group and Quinn Insurance was dominated by one man. Are these not danger signals? Banks and insurance companies which are dominated by a family are, presumably, not properly regulated for reasons which are now completely incomprehensible but this has been a pattern.

The first action that should have been taken in respect of Quinn Insurance was for the Financial Regulator to ask questions about one of the biggest companies in the insurance market. There had been rumours and reputational difficulties. I do not suggest that regulators should act on rumours but they should take rumours into account. There were stories about Seán Quinn and about Joe Moore and doubts about Seán FitzPatrick and all sorts of other people who dominated these companies and businesses. Yet they were allowed to carry on by the Government and by the regulator.

There was a bad feel about these companies and bad reports had circulated about them. Everyone relied on the regulator to do the job but it has not done it. It is easy for me to say this as a member of the Opposition and it is post factum. However, I wonder if we have learned any lessons because the response of successive Governments for the past 30 years has always been to introduce legislation such as this Bill in order to prop up a company which is in very big trouble.

I happen to agree with Deputy Boyd Barrett. The answer in these cases is undoubtedly to nationalise such companies. I recommend they should be nationalised on a temporary basis while Deputy Boyd Barrett would recommend a permanent nationalisation. In these cases, they are obviously in unfit hands and therefore should be nationalised temporarily. One cannot leave banks and insurance companies in this situation in the same hands. Neither can they remain in the hands of a management layer which has been there during all these crises.

I do not know the extent of this particular problem but we know that policyholders will have to pay the price for many years to come. We do not know the extent of the black hole. I do not applaud part of the solution, which is to sell it off to Anglo Irish Bank. I have read articles in the Financial Times and foreign newspapers and have talked to people looking at what is happening and they have said they do not believe this. They do not believe that a bankrupt bank with holes all over it is being encouraged by the Government to buy a bankrupt insurance company in the hope it will go all right. I do not know why the company was not put up for sale and sold in total to a foreign company. God bless us, but we would be lucky if we could get anybody to take it off our hands.

I hope the Minister does not respond by saying we will leave it to the regulator, but what is the Government's vision in this regard and what measures does it have in mind to ensure that this type of activity does not happen again? It sticks out a mile that we must regulate this area properly and in a way which stops Sean Quinn and other reckless people like him from taking over one of the biggest companies in the State and running it as a personal fiefdom. Otherwise this will happen again and again. It is not good enough just to introduce sticking plaster and say, "Off we go". This will cost policyholders significant money for many years to come until the next crisis.

See this speech in context