QUINN INSURANCE will need to draw down around €738m from a State-run fund in order to remain viable, the High Court has been told.
Administrators for the company gave the figure to the court today as it lodged an application for access to funds from the State’s Insurance Compensation Fund.
RTÉ News reports that Justice Nicholas Kearns, the president of the High Court, permitted the immediate drawdown of €320m from the fund, in order to permit the transfer of the company to the US insurance firm Liberty Mutual, which is to take over the insurer.
A further €418m will be cleared to be drawn down, pending further applications to the court.
Counsel for the administrators, Denis McDonald, told the court that the company was mindful of the burden it was placing on the taxpayer – but said the total cost to the taxpayer of putting the firm into liquidation could be significantly greater.
The Irish Times reports that lawyers for the Minister for Finance, Michael Noonan, consented to the transfer.
Simon Carswell wrote that the company had a deficit of €851.5m at the end of August.
He added that a further hearing was to be held tomorrow to confirm the sale of the company to Liberty Mutual; in the meantime, the administrators will meet with representatives from two lobby groups opposing the sale.
An Act providing for a 2 per cent levy on insurance premiums, intended to raise enough money to cover the Quinn Insurance funding requirements, was signed into law by President McAleese last Friday after being rushed through the Oireachtas.
When it first published that Act in mid-September, the government said that the extra funding was needed to cover the ‘solvency breaches’ which would stop the company meeting claims as they fell due.
Various ministers have defended the bill in the Dáil, arguing that liquidating the company would mean the loss of around 1,600 jobs.