Permanent administrators appointed to Quinn Insurance
The status of the professional indemnity insurance (PII) policies of more than 2,900 law firms and sole practitioners has today been thrown into uncertainty after the Irish High Court appointed permanent administrators to Irish insurer Quinn Insurance.
The Law Society said that its advice to Quinn Insurance policyholders was unchanged, in that they need not take any action. It is understood that the Solicitors Regulation Authority will make a statement on the matter shortly.
The Irish Financial Regulator, which regulates Quinn Insurance, said that Quinn can still settle UK claims. The Financial Regulator said that it is continuing to investigate Quinn Insurance’s use of certain financial guarantees (see earlier article).
Quinn Insurance provides more than 10% of the solicitors’ profession with PII.
A statement on the Quinn Insurance website says: ‘The board of directors of [Quinn Insurance] announce that it has been decided to withdraw its objection to the petition for the appointment of joint administrators to the company.’
Quinn Insurance chair Jim Quigley said: ‘This decision has been taken after very careful consideration. We have concluded that, given what has happened, it is in the best interests of the company, our employees and policyholders that, as a matter of urgency, we work closely with the administrators and the Financial Regulator to get the situation resolved as quickly as possible. In particular, we would hope that working together we can find a way to recommence business in the UK.’
A spokesman for Quinn Group said: ‘Quinn Group fully supports the decision of the [Quinn Insurance] board and looks forward to working with the administrators and the Financial Regulator to find a constructive solution for all stakeholders and, in particular, our employees. We continue to pursue a number of options and are confident that a solution will be found to secure the long-term future of the business.’
The Financial Regulator convinced the High Court to have provisional administrators appointed to Quinn Insurance on 30 March. The judge today appointed Paul McCann and Michael McAteer of Grant Thornton as permanent administrators.
There will be another hearing on the matter on 20 May.
Comments
Sounds promising - looks like
Sounds promising - looks like behind the scenes a re-structuring is taking place or buyer for the business is on the scene.
And the nearer we get to 30 September the less problem the issue will cause if it does go pear-shaped...
Law Society's Statement
A statement has appeared on the Law Society's website (entitled "Quinn insurance: update for PII policy holders"), in which the Society indicates that the administration in Ireland "is not a direct equivalent to an administration order made here in England and Wales" and "appears to be more akin to a regulatory intervention in a business...". The statement goes on to say that, even if the administration order does amount to an insolvency event, "it may be open to the SRA to exercise its discretion to grant waivers of its rules. Clearly, this, a matter for for the SRA, will be highly dependent upon all of the facts available".
Leaving aside the rather odd fact that the Society seems not to have decided whether an Insolvency Event has occurred (which presumably means that the Society has not decided whether an administration order in Ireland is "analogous to" the appointment of an administrator in England and Wales: see the definition of "Insolvency Event" in the Solicitors' Indemnity Insurance Rules 2009), it is not correct to say that the the granting of a waiver is a matter for the SRA. Rule 19.1 makes clear that the power to grant waivers (including extensions of time) is vested in the Council of the Law Society.
The power to grant a waiver
The power to grant a waiver is vested in the Council, but has been delegated to the SRA - so it is the SRA that decides whether to grant a waiver. If Quinn is in breach of solvency requirements, that is not necessarily the same as being insolvent, and if it can go on paying claims in full, it may be easiest to allow insured firms to keep their qualifying insurance for this year with Quinn. The crunch will come on renewal for 1 October this year.
Regulator? What regulator?
Isn't a regulator supposed to regulate in the interest of the profession and of the public?
Isn't part of that making sure that indemnity insurance actually works?
Does anyone know if we can petition the Legal Services Board to appoint a brand new regulator who may actually be able to do the job properly and proportionately?
best to all ,
I'm off down the job centre to look for jobs as a bouncer - it actually pays better!
Just like the financial
Just like the financial crisis, the responsibility will be thrown from one to t'other so they can all try to evade responsibility;still took the money of course.
Nearer 30/9
@Michael re "And the nearer we get to 30 September the less problem the issue will cause if it does go pear-shaped..."
not so true, what you notify can take years to
settle...
q. When is an admin order
q. When is an admin order not an admin order?
a. when the law soc say so
Anyone read alice in wonderland?
it seems that the proposal to
it seems that the proposal to reopen Uk busines being put to the regulator does not include professional indemnity insurance.no matter then how rule 6 is interpreted.the problem can only be delayed till october when it is likely a significant number of firms will be unable to get cover