Central Bank concludes Inquiry into certain persons concerned in the management of Quinn Insurance Limited (Under Administration)

• Inquiry concluded into two former directors of Quinn Insurance Limited (Under Administration)
• Settlements reached with the individuals concerned

The Central Bank has today published a Statement on the conclusion of its Inquiry into two former directors of Quinn Insurance Limited (Under Administration) (“QIL”).

In 2010, the Central Bank commenced an investigation into QIL and a settlement was reached with QIL in 2013 under the Central Bank’s Administrative Sanctions Procedure. In May 2015, the Central Bank referred the case in respect of two former directors at QIL to Inquiry.

The Inquiry commenced in 2015 and examined the participation of the two individuals in a suspected breach of Regulation 10(3) of the European Communities (Non-Life Insurance) Framework Regulations 1994 (S.I. 359/1994) by QIL.

This suspected breach related to the soundness and adequacy of QIL’s administrative and accounting procedures and internal control mechanisms relating to the management and monitoring of the assets of QIL’s subsidiaries.  Such procedures were required because the assets of its subsidiaries formed part of QIL’s technical reserves. The suspected breach occurred in circumstances where some of QIL subsidiaries had given financial guarantees in respect of finance facilities extended to Quinn Group Limited.

A High Court challenge to the investigation and Inquiry was brought by the two individuals which was decided in favour of the Central Bank in October 2017, with costs awarded to the Central Bank.

Between November 2015 and May 2019, the Inquiry dealt with procedural, documentary and other matters preliminary to the substantive hearing itself and held eight Inquiry Management Meetings. The Inquiry concluded hearing evidence in June 2019.

The Central Bank has reached settlement agreements with the individuals, as follows:

• The Central Bank concluded a settlement agreement under its Administrative Sanctions Procedure with Liam McCaffrey, a former director of QIL in December 2019.
• The Central Bank concluded a settlement agreement under its Administrative Sanctions Procedure with Kevin Lunney, a former director of QIL in July 2020.

Given the circumstance arising for the individuals at the time of settlement, which were unrelated to the Central Bank’s Inquiry, the Central Bank will not be making any further comment on the settlements.

Director of Enforcement and AML, Seana Cunningham said: “Robust enforcement action is central to our work in protecting consumers of financial services. As one of our first enforcement cases to go to Inquiry, the conclusion of this Inquiry is significant in many respects.  It demonstrates the Central Bank’s willingness to pursue cases all the way to Inquiry, if merited, under the Central Bank’s Administrative Sanctions Procedure. The Central Bank also successfully defended High Court legal challenges to this investigation and Inquiry process. This was a critically important outcome as the Administrative Sanctions Procedure is the key enforcement process under which we take action against firms that breach regulatory requirements and senior individuals who participate in those breaches. Since 2006, the Central Bank has imposed monetary penalties of more than €105m through our enforcement actions.

"The Central Bank will not shy away from deploying the full suite of powers available to it and publicly defending those powers. The important take away here is that the Central Bank may use the full extent of its powers, including pursuing cases to Inquiry, in order to promote compliance and high standards in financial services.”