... and all policyholders face 2pc Quinn insurance levy
A 2pc LEVY could be placed on all insurance premiums following the move to put Quinn Insurance into administration, it has emerged.
The Financial Regulator brought an application in the High Court to place the business into administration as it struggles with a deficit of €200m in its reserves. There were fears Quinn would not have sufficient funds to meet claims.
Now, Financial Regulator Matthew Elderfield said the administrators could apply to have a levy imposed to compensate for the losses.
Similar charges came into effect when PMPA collapsed in 1982 and the Insurance Corporation of Ireland collapsed in 1985.
Experts have speculated that the levy could be as much as 2pc.
As a result of the High Court action, administrators will run the business as a going concern in the interests of policyholders under different management. Quinn businesses offering home, health, motor and public liability insurance were affected by the action.
Tycoon Sean Quinn, chairman of the Quinn group, accused the Financial Regulator of putting 5,500 jobs at risk with the High Court move.
Mr Quinn wrote to every Government minister criticising the regulator's actions as "highly aggressive and unnecessary", claiming the move "endangers" 5,500 jobs across the group.
Mr Quinn insisted his insurance company was on track to reach the regulator's solvency requirements "by year-end".
He asked why the regulator was taking this action when "the group and Quinn Insurance are in a position to meet all their respective obligations from a cash perspective".
The Financial Regulator has been negotiating with Quinn Insurance since December after the company indicated it could fall below minimum solvency requirements.
The High Court move was instigated when it became clear lenders would not allow a €35m injection to shore up the insurer.
Grant Thornton's Paul McCann and Michael McAteer were appointed as provisional administrators until the case comes before court again on April 12.
They went to Cavan yesterday to hold a meeting with management, while the Financial Regulator also sent a team.
Both the regulator and the administrators have stressed Quinn Insurance continues to accept new policies and honour existing ones.
Meanwhile, Quinn Life is unaffected by the developments.
The Financial Regulator told the High Court Quinn Insurance had "significantly breached" its solvency ratios.