Why are we paying the Brits for failed businessman Sean Quinn's incompetence ?

Peterdalkey

In the UK on the 18th June 2001 , The Independent Insurance Company went bust. The company had written a huge amount of liability insurance cover for businesses in Ireland, including my own. The UK administrators refused all claims and only made a partial payment towards the legal costs of the insured in Ireland. In the UK, the Insurance Fund covered ALL costs and claims in for UK policy holders. Many of the Irish policyholders in Ireland lobbied Mary Harney, the then minister with responsibility for insurance regulation in Ireland. She ignored all our entreaties and in the end Irish businesses were stung for over IR£100 Million, despite the fact that all the Irish policy holders had paid the Irish Insurance Levy on the premiums. . The UK administrators and regulators said they had no liability to us as their protection was restricted to UK entities.

Fast forward ten years and Quinn Insurance goes bust, in no small part due to it’s insane underwriting in the riskiest UK liability markets and appalling management team incompetence. Can someone explain to me why the outstanding UK claims are now to paid for by all Irish non-life policyholders over the next 20-30 years to the possible tune of E1.6 billion? It appears we are repeating the grave error that was the state bank guarantee and leaving our citizens and business to pick up the bill yet again. It smacks of very serious incompetence by the minister responsible and his overpaid and under-talented advisors and civil servants. The Financial regulator and the Central Bank have direct responsibility for the operation of the insurance industry in Ireland, I would suggest that the Public Account Committee get all of these clowns in, expose their failure in this matter and set them straight as to the responsibilities to the Irish people.

Peterdalkey

Footnote: Michael Bright the boss of Independent was sentenced to 7 years in prison for his carry on in running the insurance company. This onetime darling of the media and poster boy of the city who shook up the dull old insurance industry with creative accounting portrayed many of the characteristics of our own SQ!
Could never happen in Ireland, dear boy!

sandin

Seems you are believing everything the receivers are saying without question.

In a worst case scenario that the euro falls to .67p against sterling and every claim is paid out at the maximum, the cost will be 1.6bn including over 100m in admin costs. (read the receivers report in FULL - don't just read the hysterical one sided D4 Sean Fitzpatrick is still God, journo headlines)

Well here's the other side.

Some forecasters are saying euro has hit a bottom and will resume strength again and in 12-18 months will be back at approx 90p. (UK economy is in the crapper)

Say by negotiating claims and also finding that some are not 100% correct (brits have highest incidence of false claims in world!), the claims paid out are 70% of what they regarded as worst case scenario.

Then the actual cost will be about 700m spread over a few years. Take the admin costs out and you're at 600m. Spread that over 4 years (normal claim cycle) and that's 150m a year.

Excluding the shambles of 2008-2011, prior to this the quinn group made net profits of almost 500m per year, therefore it can be argued that there was no issue with liquidity on the UK insurance arm in theory, but due to the gamble on Anglo that got out of control, a major problem did arise.

Basically, from what I can see, if quinn didn't gamble on Anglo there would be no issues at all. - I can see him now "one mistake, one bloody mistake!"

Btw - The receivers decided to close down the UK arm - it did not go "bust".

Peterdalkey

sandin wrote: »

Seems you are believing everything the receivers are saying without question.

In a worst case scenario that the euro falls to .67p against sterling and every claim is paid out at the maximum, the cost will be 1.6bn including over 100m in admin costs. (read the receivers report in FULL - don't just read the hysterical one sided D4 Sean Fitzpatrick is still God, journo headlines)

Well here's the other side.

Some forecasters are saying euro has hit a bottom and will resume strength again and in 12-18 months will be back at approx 90p. (UK economy is in the crapper)

Say by negotiating claims and also finding that some are not 100% correct (brits have highest incidence of false claims in world!), the claims paid out are 70% of what they regarded as worst case scenario.

Then the actual cost will be about 700m spread over a few years. Take the admin costs out and you're at 600m. Spread that over 4 years (normal claim cycle) and that's 150m a year.

Excluding the shambles of 2008-2011, prior to this the quinn group made net profits of almost 500m per year, therefore it can be argued that there was no issue with liquidity on the UK insurance arm in theory, but due to the gamble on Anglo that got out of control, a major problem did arise.

Basically, from what I can see, if quinn didn't gamble on Anglo there would be no issues at all. - I can see him now "one mistake, one bloody mistake!"

Btw - The receivers decided to close down the UK arm - it did not go "bust".

What a load of twaddle.
Quinn Insurance went into administration due to being insolvent and was unable to meet it's liquidity requirements or it's outstanding claims. BUST!

Interesting that you fail to address the main point being made, UK claims should be repudiated as was the case for Irish insured with Independent. Instead you go on another one of your Sean Fitzpatrick rants.

sandin

Peterdalkey wrote: »

What a load of twaddle.
Quinn Insurance went into administration due to being insolvent and was unable to meet it's liquidity requirements or it's outstanding claims. BUST!

Interesting that you fail to address the main point being made, UK claims should be repudiated as was the case for Irish insured with Independent. Instead you go on another one of your Sean Fitzpatrick rants.

Twadlle? - READ the receivers report not the glorified newspaper headlines!

Then AFTER you have read the report in full, make your comments.

And where is the Sean Fitzpatrick rant? - He still hangs around in the D4 set, many of whom have connections in the press and therefore he is given the kid glove treatment. - Or maybe you think Sean Fitzpatrick is innocent of everything? Sean Quinn never has assoicated himself with the press set and so is fair game for attack. Problem is some people believe everything a journalist says.

The UK arm of quinn insurance was owned by the Irish arm of quinn insurance. the receiveres seperated them and then sold te irish arm as a going concern and put the UK arm into admin. As they stopped trading in the UK, they, you and no-one can say how it woudl have panned out if the same system Sean Quinn used for irish insurance arm was allowed its natural form. e.g. go in cheap and gradually raise rate, challenge a lot of the dubious claims and settle quickly the real ones. In 2007 when quinn entered the UK market he expected to make losses for at least 5 years and then turn a profit.

Same in one of my businesses, I made a losss in year1 & 2, just scraped break even in year 3, made a little in year 4 and last year made very decent profits. Exactly as planned.

You are very obviously anti Sean Quinn for whatever reason, so as in the other thread, I don't see you being fair in any way.

Peterdalkey

Again you fail to deal with the the issue of repudiating the UK claims, which has nothing whatsoever to do with Sean Quinn now, but a lot to do with those of us who pay non-life insurance premia and Quinn related levies in to the future.

You are more than entitled to think SQ is a hero, I do not share your opinion and hold a contrary view. I have direct experience of doing business in a sector that was completely trashed by Quinn trying to corner the market, happily he made a complete bollix of it. Like insurance he did not know what he was doing. The man at least admitted on Vincent Brown show that he was never one to take advice, he just made up his mind to do something and charged in full on.
A genius if you win but a fool if you lose.
I have no personal animosity towards Sean Quinn. I think he was a foolish, greedy and naive meglomaniac and actually have more concern about those poor misfortunes who would seek to defend the indefensible.

smeharg

Peterdalkey wrote: »

What a load of twaddle.
Quinn Insurance went into administration due to being insolvent and was unable to meet it's liquidity requirements or it's outstanding claims. BUST!

I think you should qualify that statement with "in my opinion" as it doesn't reflect fact.

Quinn Insurance was put into administration because it didn't have sufficient regulatory reserves. That is not the same as being insolvent, having liquidity problems or being unable to pay outstanding claims.

The purpose of the reserves is in case of a doomsday scenario and the company would face a mountain of claims.

If the company had liquidity problems and couldn't pay outstanding claims it would also have been unable to pay its staff and when that happens you might as well shut the doors.

You question about the apparent difference in treatment of overseas policy holders is one for the regulators, and may possibly be explained by legislative differences and/or changes. Perhaps your energies would be better channelled into researching that rather than making incorrect and clearly biased claims and statements.

Peterdalkey

Originally Posted by smeharg [IMG]file:///C:%5CUsers%5CPeter%5CAppData%5CLocal%5CTemp%5Cmsohtmlclip1%5C01%5Cclip_image001.gif[/IMG]
I think you should qualify that statement with "in my opinion" as it doesn't reflect fact.

Quinn Insurance was found by the High Court to be insolvent following the appointment of the administrators by the regulator. Some parts of the business were sold off by the administrators without all the attached claims liabilities. It was the only way it could be disposed of in a commercial way, and it maintained another provider in the market.

Quinn Insurance was put into administration because it didn't have sufficient regulatory reserves. That is not the same as being insolvent, having liquidity problems or being unable to pay outstanding claims.

The deficit in Quinn Insurance has been largely quantified and exceeds the asset value , hence the need for the levy on top of the funds raised by the trade sales.

The purpose of the reserves is in case of a doomsday scenario and the company would face a mountain of claims.

Incorrect in normal circumstances, but so correct in the case of Quinn Insurance , Doomsday indeed. Valid claims do not change the solvency of any insurance company, improper under-provisioning does.

If the company had liquidity problems and couldn't pay outstanding claims it would also have been unable to pay its staff and when that happens you might as well shut the doors.

I assume this comment is some kind an attempt at levity. Not only was it able to pay it's staff wages, it was able forgive a huge pile of intercompany debt to other Quinn Group companies that it was propping up. The deficit arises as would never be able to pay all the outstanding valid claims.

You question about the apparent difference in treatment of overseas policy holders is one for the regulators, and may possibly be explained by legislative differences and/or changes. Perhaps your energies would be better channelled into researching that rather than making incorrect and clearly biased claims and statements.
In my humble opinion this is pure conjecture on your part that " may possibly", to use your own term, explain it. Do you have some detail of the legislative differences and or changes your refer to in the abstract, I suspect not. For the record, I have brought the matter to the attention of the Public Accounts Committee and further I have written to Justice Nicholas Kearns who is dealing with the specific matter in the courts.

Not withstanding all the forgoing, I do believe Quinn Insurance did bring forward a goodly number of innovative measures to rock the navel gazing insurance industry, especially in the areas of mitigating claims values, together with much needed competition. The pity is that he did not run the business in a proper and prudent manner.

sandin

Peterdalkey wrote: »

You are more than entitled to think SQ is a hero, I do not share your opinion and hold a contrary view. .

Where in any thread have I said he is a hero? - No where whatsoever. In another thread I asked what people thought went wrong and how a major diversified company can lose so much on a single issue. And then towards the end of the tread I state my conclusion based on all the posts (including your) that it seems to be a simple gamble that went wrong and he chased the losses.
I do question Sean Fitzpatricks assertion that he knew nothing of the CFD's and belive he knew everythign about them from day one and used Sean Quinn to prop up the share price of his bank as it is obviosuly that since 2006, things were on a downward slope.

As to your OP - I think you need to get a lot of facts right. As it was of no real interest to me, I did not have a lot of infor, but now after redaing up on it, the following applies.

Quinn Insurance UK is trading normally, albeit via a court appointed administrator.
Quinn Insurance UK's funding shortfall was due to the gamble on Anglo and not have the right liquid instruments as capital (bonds, cash deposits, liquid shares)

So legally they are NOT bust and neither are they closed down. So therefore I think your question has to be passed on to the administrators. However, I think European law on this changed a few years back - this meant that any insurance company / bank could operate in any market once they operated in another EU country and therefore if the Independent Insurance comapny went bust today, they would be liable to all losses no matter what country the customer was in. - Don't take this as gospel and its taken from the back of my head and as it doesn;t affect me, I'm not going to look it up, but maybe it's a starting point for you to see why there's a difference.

Peterdalkey

QIUK incurred massive underwriting losses in the UK market. Luckily for the UK insured all losses were underwritten by the Irish people as our government failed to cap the guarantee to Irish policy holders. It has been confirmed to me in writing by Mr Michael McAteer joint administrator of Quinn Insurance as follows

"As the Central Bank petitioned for the appointment of Administrators under the 1983 Insurance Act (rushed in to deal with PMPA), one of its objectives is to ensure policy holders are protected from any loss. No such equivalent procedure exists in the UK.
 
I don't believe it was envisaged in 1983 that Irish companies would have such exposure or operations in a foreign country, and so treated all policy holders on a pari-passu basis, regardless of their location".

Our civil servants and politicians simply failed look after our interests at the time or to repair the defective legislation in the intervening years. This failure is a testament to the quality of their work and once again we get to pay for their errors and sloppy work.

Peterdalkey

Star businessman SQ managed to lose over 6 times the gross policy revenues in the UK (source today in the High Court). Quelle Surprise! Not too much guff out of the Quinn/Anglo conspiracy theorists today!

sandin

Peterdalkey wrote: »

Star businessman SQ managed to lose over 6 times the gross policy revenues in the UK (source today in the High Court). Quelle Surprise! Not too much guff out of the Quinn/Anglo conspiracy theorists today!

My guess is this is directed to me.

Quite obviously you have a very personal issue with Quinn details of which you are not divulging.

Anyone that shows such hatred to one individual and then tries to tar anyone that has a different view to yours with a similar brush is someone that has a lot more issues of their own to sort out.


Couple of questions -
1. Can you show where I have championed Sean Quinn in any way.? - I do ask questions as to how he switched for a very diversified group to a single entity gamble, and I give him credit for creating jobs and challenging cartels in cement and glass, (whish is well deserved) but I do not champion him.

2. I and many others still believe that Sean Fitzpatrick knew and was involved in all of Sean Quinn's CFD's regarding Anglo and until it is stated by Sean Quinn or proven otherwise,I will hold that view - but its a personal view and based on the verifiable lies and deceit shown so far by Sean Fitzpatrick.

3. Do you understand the insurance model that was being operated by Sean Quinn? Current stated losses cannot be compared with what could have been if the business was ongoing. - If I stopped trading today, I'd still have to pay leases, rates and service charges of over €1m per year and therefore my losses would be over €1m per year. However by trading normally, I make a profit. Quinn Insuranc eis not trading normally. With regrad to the solicitor insurance, only those who CANNOT get insurance elsewhere are being insured as they have to be. All others have been told to go elsewhere. Put it a simpler way - they are ONLY insuring LOSERS! So the model is completely and entirely different to a normal insurance model. It was definitely underfunded but not by anything near to what the administrators are now stating as they have effectively thrown away all te profitable insured risks and therefore not balancing the books like a normal insurance company.

Peterdalkey

This is your second attempt to appoint yourself as the arbiter as to my motivation. the last time you got a slap. Perhaps you are just a victim of an over fertile imagination.
I do not know SQ or have any hidden agenda, I have articulated my beliefs here and in other forums quite clearly. . I do very much resent the negative and damaging cloud that his activities have cast over the whole of Irish entrepreneurship.

I do not accept your simplistic analysis of the insurance business operated by Quinn or the even more naive suggestion that he might have been allowed to trade his way out of insolvency, illegal in itself.

<mod snip>

As to the point raised in the original question posed in this thread, the answer has been provided by Michael McAteer, joint Administrator of Quinn. The off topic debate was started by you and one other, I merely responded. That was probably a mistake on my part and accordingly will post no more on this thread.

dbran

Sorry lads. This is just getting personal.

Thread closed