AN OIREACHTAS COMMITTEE will this afternoon discuss the impact of the losses at Quinn Insurance – which could result in a levy being added to most Irish insurance policies for several decades.
The High Court was told in August that the liabilities could exceed €1.6 billion – an amount which doubled the formal forecast of €738 million made in 2011.
The losses at the insurer, combined with rules on the minimum cash on hand that insurers are required to keep on hand in order to deal with potential claims, means the insurer has to be bailed out by the State’s Insurance Compensation Fund.
That fund, in turn, is funded by an extra levy added to non-life assurance policies – meaning the ordinary policy holder is forced to contribute towards Quinn Insurance’s losses.
The administrators said earlier this summer that their estimate for the potential losses at the insurer had to be raised because of a “culture of suppressing estimates” which had been uncovered at the insurer.
Thy added that the company’s inability to offer the necessary financial guarantees meant it could not adopt a currency hedging strategy, meaning any major moves in the value of euro or sterling could leave it further exposed.
Seán Quinn himself as previously described the costs of administration at the insurer as “truly shocking”.
Representatives from the Central Bank, the Department of Finance, and Grant Thornton will be present at the meeting to brief members at the meeting, which is set for 2pm.