Dáil debates

Wednesday, 28 April 2010

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 43: To ask the Minister for Finance the steps taken to ensure the greatest possible protection of employees at a company (details supplied); the position regarding the status of the company and the wider group; the number of entities that have expressed an interest in acquiring this company; and if he will make a statement on the matter. [17527/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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On 15 April 2010, the High Court appointed full time administrators to Quinn Insurance Limited. This follows the company's decision to consent to the appointment made by the High Court on application made by the Financial Regulator.

It is the opinion of the Financial Regulator and Quinn Insurance that this step is in the best interests of policyholders. The company is still able to pay claims and renew policies in the normal way in Ireland and continues to settle claims in the UK. It also puts the business on a sound commercial and financial footing which best serves the proper and orderly regulation of Quinn Insurance and the wider insurance market.

I am conscious of the position of employees of Quinn Insurance as a result of the appointment of the joint administrators to the company. I am aware a key element in safeguarding employment in Quinn Insurance is the reopening of its UK business.

In this regard, I welcome the decision by the Financial Regulator to allow the company to write motor insurance cover for provisional driver licence holders in the United Kingdom, including Northern Ireland, with effect from 22 April. This is an important first step in ensuring the value of the business is maintained as it enhances the prospect of the administrators being able to sell the firm as a going concern.

The submission of detailed business plans and proposals for the reopening of further lines of business in the UK is a matter for the administrators. The Financial Regulator informed me he has been engaged with the administrators in recent weeks and is giving all proposals full consideration. Before making any decision on this matter, the Financial Regulator will have to be satisfied that any proposals stand up to scrutiny and are supported by robust and detailed information, actuarial analysis and pricing.

The Government remains concerned about the position on employment in Quinn Insurance generally. That is why the parties involved must continue to work to find a solution that addresses the issues of putting the company back on a sound commercial and financial footing. This is the best way of protecting jobs and the wider interests of the taxpayer.

The administrators said they will continue to engage constructively with staff and management at the company as they endeavour to secure its future. They will be meeting with staff representatives on Friday, 30 April, to advise them of their decision on what measures are necessary for employment levels as part of the recovery plan for the company.

I cannot comment directly on the issue of the number of companies that have expressed an interest in acquiring Quinn Insurance as this is a matter for the administrators rather than my Department. However, I am aware the administrators have indicated that a significant number of companies have expressed an initial interest in the company.

A complete analysis of the financial position of the company is still being carried out by the administrators and this must be completed before there is further progress on this matter.

Regarding the broader Quinn Group, I have been informed by the Minister for Enterprise, Trade and Employment, Deputy Batt O'Keeffe, that the chairman and chief executive of Enterprise Ireland met with the senior management of the group earlier this month. He has indicated that Enterprise Ireland stands ready to provide all possible support to the company with a view to maintaining the maximum number of jobs when the company's position is clarified presently.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The Minister will be aware there is a great deal of shock and uncertainty among employees in the Quinn Group. All of them support the work of the Financial Regulator and administrators. What is the Government's approach to the protection of employment in the group?

Two weeks ago, newspapers reported the chairperson-designate of the State-owned Anglo Irish Bank on the €2.8 billion debt owed by Mr. Quinn and his family to the bank. The Minister has a relationship agreement with the bank. Will he clarify if he was consulted about those proposals by the bank?

If a State bank is, in effect, acquiring an insurance company, do issues arise regarding competition or EU regulation? In particular, in the context of the relationship agreement, has the Minister been advised by the chairman of Anglo Irish Bank about the proposals that were reported in the media about two weekends ago? That is all we need. The lights have gone out.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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Yes, but I think I can throw some light on the questions the Deputy asked. I agree with the Deputy. The Government is very concerned about the preservation of employment, both in the insurance company and in the wider Quinn Group. That is a core concern of the Government, which is the reason we asked the chairman of Enterprise Ireland to take an interest in this matter just before Easter. I am aware he has liaised with the Minister for Enterprise, Trade and Employment about that particular aspect, which is of fundamental importance.

The Deputy rightly made the point that there is a substantial indebtedness, which has been acknowledged by Mr. Quinn, his companies and associated members of his family, to Anglo Irish Bank.

The next issue we must examine is the question of what the Government has done to support the efforts of the administrator and the regulator to sustain the viability of the Quinn Insurance company. In that connection, the Government authorised the Secretary General of the Department of Finance to put our regulator in possession of a letter of comfort from the Department of Finance for the attention of the United Kingdom authorities which made clear the legal implications of the nature of the State guarantee that already exists in our legislation for policy holders. Naturally, the United Kingdom authorities were concerned about that.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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We will hear a brief supplementary.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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If it is a short supplementary I can continue with the Deputy's questions.

We then have the question of Anglo Irish Bank and the relationship agreement. As I said in my reply, I am not privy to information on who is bidding in the capacity of any information the regulator would give me from the administrator but I am aware, from the chairman of Anglo Irish Bank, that Anglo Irish Bank is naturally anxious to minimise the exposure of the taxpayer in connection with the realisation of any liabilities or security it has over both the wider Quinn group and Quinn Insurance. In that connection, it is preparing a proposal for the consideration of the administrator but that proposal will have to be considered by the administrator of the court and will have to be approved under the relationship agreement by myself and the Government as well.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The Minister spoke about the motor insurance business being resumed in the UK market, which is a matter of great concern to employees of Quinn Insurance. He spoke also about motor insurance for young drivers but I understand that is only 10% of the market in the UK. Is the Minister aware of the progress, if any, that is being made on other lines which are apparently profitable - nobody is talking about unprofitable lines - and what the timeframe might be? The Minister referred to the Secretary General of his Department sending a letter to the UK authorities, presumably to the Financial Services Authority, HM Treasury or to both-----

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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Our regulator was in possession of it for transmission to the FSA.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Can the Minister say if any progress has been made on other lines of work opening up? Also, what would the chairman of Enterprise Ireland have to do with Quinn Insurance Ltd? I heard him on the radio but I was utterly confused as to what he was on about.

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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First, in regard to the United Kingdom motor business, as Deputy Burton correctly stated, the learner driver side of the market has been opened and substantial progress is being made on other elements of the motor business. However, the pricing of any policies offered in the United Kingdom must be at realistic levels. That issue has delayed progress somewhat to date but I have been advised by the regulator today that he has made progress on that issue and hopes to resolve matters within a relatively short period of time.

On the question about the chairman of Enterprise Ireland, his involvement is focused exclusively on the job creation aspect and advising the Minister for Enterprise, Trade and Employment of the possibilities in that regard and, through him, the Government.