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  • Writer's pictureDavid Kieran

Policyholders here paying for claims associated with collapsed insurer Quinn that arose in Britain.

Insurance policyholders in this country are paying for claims associated with the collapsed insurer Quinn that arose in Britain and Northern Ireland.

People paying for insurance are also stumping up for the bailout of Setanta here, even though it was a company registered and regulated in Malta.

The bill for the Quinn Insurance debacle is €1.1bn.

Around a third of this is for claims in Northern Ireland and Britain, which amounts to roughly €360m.

Quinn Insurance was a single company, and did not have separate Northern Irish or British divisions.

This led to a decision being taken to cover all the claims, irrespective of where they arose, when it was placed into administration.

However, changes in European rules since the Quinn collapse mean such a situation will not arise in future.

Now the country where the insurance business is written has to bail out a bust insurer and meet its claims.

This has meant that this country's Insurance Compensation Fund is also picking up the tab for the business written here by Enterprise Insurance, the Gibraltar-registered insurer that collapsed two years ago.

Jonathan Hehir, of brokerage, said it was unfair that motorists here have to pay levies to bail out British policyholders of Quinn while paying for the Setanta debacle.

The Department of Finance said it had no plans to pursue the Maltese authorities to cover some of the 1,500 claims still to be paid.

Setanta is being liquidated in Malta.

A spokesperson for the department said it would be difficult to take action against the Maltese regulator.

Legal advice would have to be taken in Malta.

"The Department of Finance's legal unit does not consider that there is sufficient likelihood of a successful action being brought to justify the costs which would be incurred in seeking such advice and information," the spokesperson said.

Insurers based in other European countries are allowed to "passport" into this country if they are regulated in another European Union country.


The department added that both Setanta and Enterprise operated here under the 'passporting' provisions of the European Union freedom-of-services rules in order to sell insurance business in Ireland.

"While there have been cases, such as the liquidations of Enterprise and Setanta, which have caused difficulties, Ireland has also positively benefited from these EU rules through, for example, the building up of our large life insurance sector," the department said.

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