The terms and conditions of Liberty Insurance’s 400 Irish employees will not be affected by a proposed cross-border merger with a related Spanish entity, the Commercial Court has been told.

Cavan-based Liberty Insurance DAC, part of the US-based Liberty Mutual group of companies, wants court approval for a cross-border merger scheme.

The application is part of the group’s plans to consolidate its insurance businesses in Ireland, Portugal and Spain.

The US insurance giant had in 2011 acquired Quinn Insurance, which had gone into administration some 12 months earlier. It was originally founded by Northern Ireland businessman Seán Quinn.

Liberty Insurance DAC, formerly known as Liberty Insurance Ltd, proposes to transfer its non-life assurance business to a Spanish entity, Liberty Seguros Compania De Seguros Y Reaseguros SA (LSCSR).

Capital efficiency

As well as the transfer of business, it is also proposed the Spanish firm will absorb Liberty Insurance DAC’s remaining assets, liabilities and obligations and Liberty Insurance DAC’s Irish-based workers would become employees of LSCSR.

Liberty Insurance DAC currently has about two million policies, most in Ireland, and net assets of €217,667,000.

In addition to acquiring the Irish company, LSCSR will also merge with Liberty Portugal.

The proposed merger will facilitate great capital efficiency within the group, the court was told. It is proposed Liberty Insurance DAC’s workers in Ireland would become employees of LSCSR.

Liberty Insurance DAC, represented by James Doherty SC, said its workers would retain their current labour conditions, enjoy the same rights and benefits, and not be prejudiced in any way by the merger.

The matter was admitted on Monday to the fast track Commercial Court list by Mr Justice Robert Haughton who made a number of directions to progress it and returned it to October.