ALL MOTORISTS and home owners will have to pay an annual 2 per cent levy on their insurance premiums, following the passage of legislation which invests €240 million of public money to meet the losses on the Quinn Insurance books.
During the debate claims were made that it was costing €500,000 to save each of the 1,600 jobs in Quinn Insurance.
Both Government and Opposition TDs said the lessons of previous insurance debacles including PMPA and the Insurance Corporation of Ireland had not been learned.
The Insurance (Amendment) Bill, which was passed by 97 votes to 42, puts €240 million of public money into an insurance compensation fund to allow the company to be sold to a joint venture of the Liberty Group and Anglo Irish Bank.
Before the second day of the two-day debate on the Bill began, Taoiseach Enda Kenny criticised Opposition TDs who objected to the guillotine on the Bill. Mr Kenny said he was “astonished” that none of them mentioned “the fact that 1,600 jobs in Cavan and Blanchardstown depend on this Bill”.
Minister for Finance Michael Noonan said later however that the primary purpose of the Bill “is not to save jobs in Quinn Insurance. That was done as soon as the Liberty Group decided to put private sector money into Quinn Insurance and guarantee” that the jobs would be secured.
Mr Noonan said the Bill would mean that people who were insured by Quinn would now have their claims honoured and those “who would no longer be insured if the company went out of business will continue to be insured.
“It also means the State is not carrying the full burden, because the Liberty Group is coming in.” The Minister also apologised that the Bill had to be rushed but it was necessary so the matter could be signed off on for the High Court mention.
“I admit the situation is not ideal” he said and he originally planned to introduce the Bill in June. But he had to consult the EU and “the initial advice I received from the EU was incomplete” and they had to adjusted the Bill when the full advice was received.
Áine Collins (FG, Cork North-West) said the introduction of a 2 per cent levy was exactly what happened after the collapse of PMPA, almost 30 years ago, when it collapsed after “providing cheap insurance without sufficient funding to back up claims”.
Fianna Fáil public sector reform spokesman Seán Fleming said the bailout would cost the public €500,000 per job or “€720 million to save the 1,600 jobs in Quinn Insurance”.
He added that “people who were involved in AIB at the time of the ICI debacle have much to answer for regarding where we are today . . . we set the seeds then for the lack of regulation of the banking sector”.
He accepted that the ICI situation had to be dealt with but “not a single person in AIB paid a cost for it. No one lost his job, was disciplined or sidestepped.
“No board member resigned”, he said, but if that generation of senior bankers knew that if they got things wrong they would suffer and would not automatically be bailed out with a blank cheque “we would not be here today. They would not have taken the chances they did”.
Shane Ross (Ind, Dublin South) said that in nearly all cases of financial collapse these industries or companies “are one-man bands. The PMPA was basically dominated by Joe Moore and the Moore family. The Goodman group was obviously dominated by one man.
“The Anglo Irish Bank collapse was certainly dominated by one man. The Quinn group and Quinn Insurance was dominated by one man.”
Banks and insurance companies, dominated by a family “are, presumably, not properly regulated for reasons which are now completely incomprehensible but this has been a pattern”.
