Court approves €738m from fund for Quinn Insurance

The High Court has approved the payment of €738m public money from the State's Insurance Compensation Fund to meet the losses of Quinn Insurance and to clear the way for its sale to a joint venture of the Liberty Group and Anglo Irish Bank. If the €738m payment was not sanctioned, the alternative scenario presented was that a liquidation of the insurance group would involve costs of up to €1.3bn, the president of the High Court, Justice Nicholas Kearns noted. He was satisfied a "comprehensive evaluation of all relevant factors" had been undertaken. The Minister for Finance, through his counsel Sarah Berkley, had indicated support for the payment out and said the funds were available. A sum of €320m will be paid out immediately from the fund while applications for further payments out will have to be made to the court. Mr Justice Kearns will hear an application this week by the administrators of the insurance group for orders allowing the sale to proceed. Lawyers representing groups called Concerned Irish Citizens and Concerned Irish Business told the court today they were anxious that the position of employees, policy holders and taxpayers be protected and queried whether, in that regard, all necessary information was available to the court. Denis McDonald SC, for the administrators, said some information was confidential and could adversely affect the proposed sale if released. Certain steps still had to be taken and, if certain material was put in the public domain, there was concern other parties might take steps which could jeopardise the whole process. Employees and policy holders would fare much better if the sale went ahead than in a wind-up scenario as that could involve a deficit of up to €1,300m, he added. Counsel also said that a lot of the objections raised by the two groups related to issues affecting taxpayers. These raised issues of policy and were not for the court to determine. John Gordon SC, for Concerned Irish Business, said every insurance policy holder in the State will be subject to a 2% levy under the proposals for years to come. He was anxious that all information was available to the court before making its decisions. Pauline Walley, for Concerned Irish Citizens, said she was concerned also for employees of the group who were worried whether their jobs would still exist after the proposed sale. Her clients were not trying to destroy the sale but had genuine concerns. Mr Justice Kearns said he would deal with the transfer application today. The court hearings came after legislation was passed by the Dáil last month for the injection of money into the Insurance Compensation Fund to meet the Quinn Insurance losses. The Insurance (Amendment) Bill provides for all motorists and home owners to pay an pay an annual two per cent levy on their premiums. During the Dáil debate, claims were made that it was costing €500,000 to save each of the 1,600 jobs in Quinn Insurance. Both Government and Opposition TDs said the lessons of previous insurance debacles including PMPA and the Insurance Corporation of Ireland had not been learned. The proposed sale of the insurance group to Liberty is dependent on High Court approval and securing a licence from the Central Bank.