THE FINANCIAL Regulator is planning to seek information from the Quinn Group and its auditors, PricewaterhouseCoopers (PwC), to determine who was aware of guarantees provided by Quinn Insurance subsidiaries on the group’s debts.

The demand for further information marks an intensification of the regulator’s investigation into the circumstances in which guarantees were provided by the insurer’s subsidiaries on group debts.

The guarantees pushed Quinn Insurance into technical insolvency, leading to the appointment of joint administrators to take control of the running of the firm.

Investigative work is being undertaken to determine who at Quinn Group and PricewaterhouseCoopers was aware of the guarantees, and when they became aware of their existence.

The regulator successfully put the insurer into administration after it discovered in March that guarantees had been provided by Quinn Insurance subsidiaries as far back as 2005 on Quinn Group debts of more than €1.2 billion.

An investigation into breaches of insurance regulations was launched after joint administrators Michael McAteer and Paul McCann of Grant Thornton were appointed to the insurer in March.

The regulator is examining breaches of solvency rules and the conduct of individuals in failing to disclose the guarantees, as well as systems failures at the company.

Regulatory staff have assessed records taken from the firm’s head office in Cavan last March, and have a clearer picture of when the guarantees were created, who had knowledge of them and when they first became aware of them.

They are planning to seek further information from the Quinn Group to trace the “audit trail” and fill in any further gaps in the investigation, according to sources familiar with the inquiry.

In the next stage of the investigation, the regulator is preparing to seek information circulated between Quinn Group and Quinn Insurance, and their auditors PricewaterhouseCoopers, in relation to the creation of the guarantees.

This information will be scrutinised before the regulator considers whether to take enforcement action, or to refer its findings to the Director of Corporate Enforcement or the Garda.

The regulator has claimed that the guarantees were not disclosed in the company’s quarterly solvency returns or in the accounts of the firm, the regulated entity.

Quinn Group has said the guarantees were referred to in the accounts of Quinn Insurance subsidiaries and they did not need to be disclosed to the regulator in the solvency returns as there was no claim against them from the lenders to the wider group.

The group has said PricewaterhouseCoopers had a duty to report the company if it fell below the required solvency levels, and that no such report was issued.

Certain directors of Quinn Insurance were unaware of the guarantees, the High Court was told in March when the regulator applied to appoint the administrators.

The regulator said the guarantees reduced the amount the firm had in reserve to protect policyholders against possible claims, putting 1.3 million customers at risk.

The administrators are running Quinn Insurance to put the firm on a sound financial footing.