Cowen plea over Quinn resolution

Quinn Insurance employs 600 people in County Fermanagh

The Irish Prime Minister has said the independence of his country's regulator must "be respected" in the search for a Quinn Insurance resolution.

The High Court in Dublin put the firm into administration for breaching solvency rules and it was ordered not to write any new UK business.

The firm employs about 600 people in Fermanagh and a rally in support of the workers has been held in Enniskillen.

Brian Cowen said the situation at the Quinn Group was "very complex".

Speaking in Dublin on Thursday, he said every person had a "role to play" in resolving the issue, but that the independence of the regulator must not be compromised.

"There are issues to be addressed in that respect and all of the discussions that are taking place are an effort to find a solution and meet those sort of requirements," he said.

When Mr Cowen was asked if taxpayers' money would be used to bail out the Quinn Group he said the Irish Finance minister Brian Lenihan had "pointed out the need to see in what way a solution can be found that best protects the taxpayer".

RTE reported on Thursday night that the Anglo Irish Bank has proposed injecting 700m euros into the Quinn Group as part of a financial restructuring package.

The plan, if agreed, would see 150m euros injected into Quinn Insurance and 550m euros would be used to pay off bondholders.

The Anglo Irish Bank would become majority shareholder in the Quinn Group if the plan was approved.

It is understood the plan faces significant obstacles. The financial regulator has some concerns and the deal would also have to be approved by the European Commission.

The Quinn family and their businesses owe their lenders around 4bn euros.

The joint provisional administrators of Quinn Insurance Ltd (QIL) wrote to Irish insurance brokers on Thursday to reassure them the firm continues to trade as a going concern and that "all of its liabilities are being met as they fall due".

The joint provisional administrators told brokers that during an administration procedure, by law, the company cannot be placed into liquidation.

"In the history of the administration process since it was introduced in 1983, no company which has gone into administration has gone into liquidation," the statement said.

Rally

"Under the administration procedure, we may apply to the High Court to have access to the Insurance Compensation Fund for any sums which we and the court consider are required to enable us to carry on the business of QIL and to perform our other functions under the relevant legislation."

On Thursday, employees at Quinn Insurance said a meeting with administrators in Enniskillen earlier was "positive".

The response came as a new plan aimed at lifting the ban on Quinn doing business in the UK was presented to the Irish Republic's Financial Regulator.

A rally in support of the employees at Quinn Insurance took place in Enniskillen on Thursday evening. Another planned for outside the regulator's office in Dublin on Friday has been cancelled.

Caroline Donnelly, a workers representative at Quinn insurance, said staff had been reassured by the meeting and that the administrators had let them voice their concerns.

"They reassured people they were doing everything they could," she said.

"They were treating the business as a going concern, they were trying to keep everything running as normal and would be doing everything in their power... to get the company up and running again as it should be."

Pressure

The Financial Regulator in the Irish Republic, Matthew Elderfield, has successfully argued in court that in effect the company had failed to follow rules for financing insurance claim cover.

Mr Elderfield, said that money from the insurance arm of the company was being used as security for bank loans made to other parts of the Quinn Group.

The fear was if the banks called in their loans then policy-holders could be left in the lurch, though Quinn has insisted there was no chance of that happening.

On Wednesday, Sean Quinn said the company was losing money as a result of the action.

A statement from the Quinn Group and family said the debt of 2.8bn euros owed to Anglo Irish Bank was secured on the family's international property portfolio and their shareholding in Quinn Group.

It said Quinn Insurance had "ample liquidity" and that if the firm could be removed from administration there would be "no difficulty in repaying both the group and family debt as well as continuing to provide long-term employment for all concerned".

Over the past few days, Quinn employees and politicians have put pressure on Mr Elderfield to overturn both the administration and the ban on undertaking new business in the UK.

A crowd of up to 1,000 people took part in a rally organised by the Cavan Chamber of Commerce in the town centre on Wednesday evening in support of the workers at Quinn Insurance.

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