Unbelievable - Quinn insurance bailout levy

jmayo · 26-04-2011 05:55PM

Laminations wrote: »

Oh don't worry jmayo, we paid Nyberg handsomely to tell us what went wrong so it doesn't happen again

Yeah another report telling us it was systemic failures and that there are lots of people to blame, basically everyone.

Pity is, it doesn't actually name any of the people who were meant to be running these failed systems. :rolleyes:

The report is not worth the paper it is written on.

later10 wrote: »

Sorry, this has nothing to do with the thread, or the issue as to why Minister Noonan is about to visit this expense on the Irish public when he can easily decide to refuse to bridge the shortfall and let the company go from there.

It has a lot to do with the thread, since people are quesitoning why quinn insurance needs to be bailed out.
The causes of this runs deep and you seem content to forget those and just have a go at the current crowd who are now saddled with the mess.

What I do want from the current crowd is decisive action that results in appropriation of the assets of anyone involved in dodgy deals with Anglo.
That includes those that carried out hidden share deals.
Lets call is Socialising Part II.

I have always figured that quinn insurance arm might need to be saved but the rest of the group should have been left sink.
In most other countries he would be facing criminal charges for endangering his insurance arm trying to prop up his other interests and prop up his Anglo gambles.

later10 wrote: »

Minister Noonan is afraid. He is afraid of the idea that he is going to contribute to 4000 job losses, and clinging to the notion that he can 'make it back'. Is this, too, going to be the cheapest bailout in history?

No I think he is more afraid that a lot of people and businesses will be left with no insurance and will not be able to reinisure themselves.

Funny you mentioned the immortal lines issued by a man I recall you defending not so long ago. :rolleyes:

oceanclub wrote: »

Here's the thing I don't get; other characters like Fingleton, Seanie, etc, rightly received almost universal condemnation for their actions. Yet I see multiple Facebook groups in support of this guy, with people frothing at the mouth in his defence. What makes this guy special?

P.

They are seen as more arrogant.
quinn was seen as poor peasant done good, who backed the local GAA club and played cards for a €5 with his mates on a Tuesday night.
Also he created jobs in certain areas that had high unemployment.

Up to few years ago I would have said he was tough smart business guy who worked hard for what he had got.
After seeing the sh** he was involved with in Anglo and diverting funds from insurance company, I would have no issue seeing him and his kids in jail.

Einhard · 26-04-2011 05:59PM

Amhran Nua wrote: »

How many companies? What level of cost? Which companies and how big of a bite does insurance take out of their income? Details, I'm a big fan of details, and I don't think anyone is willing to just accept a handwavy general excuse any more. It's our money, let's get a receipt.

I don't disagree with your point, and I'm not arguing that the levy is necessarily a positive thing, or even arguing the potential merits as such. I'm trying to see what the reasoning behind the move might be. I don't believe in this mythical "golden circle" which secretly pulls the strings of FF, the Greens, FG, and Labour, so when I see the current administration proposing such a scheme, I don't think it's unreasonable to ponder their reasons. I don't think it's good enough to just claim "Oh same old corrupt politicians, looking out for their own" as some people are wont to do. I suppose what I'm trying to do it play the devil's advocate.

Besides, given how much these new customers would swell the accounts of other insurance companies next year, it wouldn't be too much to ask that they take them on board gratis for the remaining policy term if they sign an agreement to stick with the company for one year afterwards. Bit of legal tapdancing but quite doable.

Why would the insurers sign such a deal? If the businesses need insurance, they'll have to purchase it next year anyway, regardless of any special treatment on behalf of the insurers.

I keep seeing Bertie telling a tribunal about his confirmation money, for some reason...

Not sure what that has to do with retrospective criminalisation tbh!

PhatPiggins · 26-04-2011 06:03PM

later10 wrote: »

I would call saving Quinn 'whacking a mole'. Why not, now save Quinn's debtors too?

I hate glib comments like the one I am about to make, but this has to be nipped in the bud. The exchequer cannot, in a progressive capitalist society, be held accountable for non financially systemic private corporations.

The group owe €2.8 billion to Anglo. Anglo have made provisions for €2.2bn. This leaves about €600m of a shortfall. We are being asked to provide something in the region of €620m to a loss making business in order that we might - hopefully, some day - get back that investment. We could lose a lot of money and never recover much at all. Does this make sense to you? does that appeal to your intelligence?

There should be no illusion about this. This, if granted, will be a political decision. It is not compulsory, it has not been pre-determined by Fianna Fail. Minister Noonan can let Quinn go, he just needs balls to do it.

Did Quinn Insurance fail because it used a flawed model or because it was used as collateral by a failed gambler?

later12 · 26-04-2011 06:04PM

jmayo wrote: »

It has a lot to do with the thread, since people are quesitoning why quinn insurance needs to be bailed out.
The causes of this runs deep

The causes do indeed run deep, and Fianna Fail are to blame for very much of that indeed. However while Quinn does need to be bailed out, we do not need it to be bailed out; we do not *need* Quinn Insurance. Do the maths.

No I think [the minister] is more afraid that a lot of people and businesses will be left with no insurance and will not be able to reinisure themselves.

They can sell the bloody books, they can give them away for all i care, tbh.

Funny you mentioned the immortal lines issued by a man I recall you defending not so long ago.

Might as well have Lenihan in there.

Amhran Nua · 26-04-2011 06:04PM

Einhard wrote: »

Why would the insurers sign such a deal? If the businesses need insurance, they'll have to purchase it next year anyway, regardless of any special treatment on behalf of the insurers.

They might not purchase it from the same insurers that took them on gratis for the remainder of their policy. If the insurers are guaranteed at least one year's payments it may well be worth the risk to them, plus the likelihood of ongoing business if the new customers like the service.

Einhard wrote: »

Not sure what that has to do with retrospective criminalisation tbh!

More to do with the rule of law and how tribunals sidestep that. Has the new government excised tribunals and replaced them with a courtroom yet? If not they need not fear being seen as exercising justice on a whim, they aready are.

later12 · 26-04-2011 06:06PM

PhatPiggins wrote: »

Did Quinn Insurance fail because it used a flawed model or because it was used as collateral by a failed gambler?

A little from column a, and a little from column b!

Einhard · 26-04-2011 06:45PM

Amhran Nua wrote: »

More to do with the rule of law and how tribunals sidestep that. Has the new government excised tribunals and replaced them with a courtroom yet? If not they need not fear being seen as exercising justice on a whim, they aready are.

Perhaps if we were living in America! Tribunals aren't extra-legal processes, and AFAIK, the right to silence isn't absolute in this jurisdiction.

Pete_Cavan · 26-04-2011 06:45PM

hinault wrote: »

Capitalism created this problem, let capitalism resolve the problem.

I see a lot of posts in this thread along these lines, that capitalism got us into this mess. I would argue that what we have in this country is nothing like capitalism;

Under capitalism if a business fails, it fails - here we bail them out
Base wage rates should be relative to the cost of living - we have fixed wage agreements, often set by the labour court, and social welfare payments and other benefits which mean in some cases you are better off not working
Property prices should be dictated by supply and demand - we offered tax breaks which distorted the market and now NAMA are hording property
Rents should also be set by the laws of supply and demand - here they are bound by upward only reviews and rent allowance which creates an artificial floor in the market
Electricity prices should be determined by cost of production - here up until very recently, ESB prices were kept high to encourage people to switch to Bord Gais to give the illusion of competition, as well as price guarantees for inefficient producers (windfarms)
Now the cost of insurance is not set by the market, it is the market price plus a government imposed levy

I am surprised they are able to move around the Dail at all with all the elephants in the room. We have businesses in bed with, or at least in the race tent with politicians and Seanie Fitz out playing golf with Biffo and whispering in his ear "We are too big to fail". We have champagne socialists in unions who cant see the irony of the union leader collecting a six figure salary paid for by fees which their drones members must pay, and are willing to hold the country to ransom over half an hour a week to cash a cheque they didnt even receive. If you want capitalism to resolve the problem you are not going to get it anytime soon around here.

johnfishin · 26-04-2011 06:51PM

ei.sdraob wrote: »

I am waiting for someone to post that Quinn is "systemic" to the Irish economy! that argument worked wonders for Anglo sure :rolleyes:

Its just typical that we are fed the same ol lies in different format and its as if we all say ''well sure we're f***ed anyway''!! I don't suggest violence but there has to be radical change in the way the country is run from top to bottom. If this was America at least we could see these high flyers in handccuffs.

dan_d · 26-04-2011 07:33PM

population wrote: »

I am sorry for anyone who could potentially lose their job, but the business failed. It should be let go. It is also incredible that another failed business with such an incestuous relationship with Quinn Insurance is the one pulling all the strings in this deal.

In the manner that countless other private companies failed and went bust. Grr..

dan_d · 26-04-2011 07:36PM

jmayo wrote: »

No but he did make the decisions to try and buy a bank.
He also made the decision to use the insurance company funds to try and keep the rest of his empire afloat.
He made the decisions to divert funds from his insurance company which could possibly have meant the customers of the insurance company were not adequately covered.
Added to this he and his family are walking away from their huge debts to Anglo and by extension the debts they have dumped on us the taxpayers.

So please forgive me for not having much respect for the guy.

And I know since you would be from the ff side of the house you wouldn't have much respect for the current government. :rolleyes:
I can see why they are having to bail out one of the primary insurance companies in the country.
This mess was created long before this week.
I await some braying from the Cork messiah and from mr amnesia from Blancherstown. :rolleyes:

What angers me is we as a nation, our regulatory authorities, our company governance authorities learned a lesson over 30 years ago about letting people in insurance get involved in banking. :mad:
Yet it was allowed happen all over again.

Also what angers me is that quinn and his family dump their gambling losses on us.

No wonder he only played cards for less than €5 every Tuesday night as we can now plainly see how sh** he was at it.

The same point could be made about bailing out AIB a number of years ago....Apparently we didn't learn much about bailing out banks then either, since we're doing it all over again.

touts · 26-04-2011 08:14PM

Quinn Group is only systemically important to the Cavan economy not Ireland. The Pro-Quinn Lobby group is excellent in managing the PR of the situation with protests and sit ins. They are nothing more than a new version of the old age medical card campaign a few years ago.

However they are loyal to their jobs not to Quinn himself. He is just the person who provided the jobs with his business philosophy of undercutting all opposition. He took over several companies (e.g. the Barlo group) and asset stripped them leaving hundreds unemployed. The workforce in Cavan benefitted with some crumbs falling from the feeding frenzy on the top table above them. However increasingly the scraps falling down to them got smaller and smaller as he had started to move jobs of asset stripped companies over seas (the Merriott Radiator factory in Clonmel was dismantled and moved piece by piece to a new factory he built in Wales with the help of massive grants from the Welsh assembly). It was inevitable that they were going to get consumed in the out of control frenzy.

The state should break up the Quinn group and leave the individual components stand or fall in their own right. Not a penny of state aid should go to the group. If necessary asset strip the individual elements and sell them off to the highest bidder who would then be free to do with the products and components as they wish. What goes around comes around and if the workforce are as efficent and competitive as they claim on the media then they will have no problems retaining their jobs.

CarrickMcJoe · 26-04-2011 09:04PM

So now we have another tax (sorry levy) to pay for Quinns gambling, what if he had made € 620 million, would he be sending all us eejits a cheque?

BengaLover · 26-04-2011 09:06PM

Silly question but does this affect only Quinn customers or is everyone being tolled?

yahoomac · 26-04-2011 09:23PM

we irish people are going to have to stand up to this insurance levy it is time to go back to dublin like we done in november and stop this sean quinn gambled his money let him pay i picked the wrong horse in the grand national can i get a levy /bailout on that go after the big boys for the money not the paye worker again

Liam Byrne · 26-04-2011 09:55PM

It's an absolute disgrace alright.

Maybe we should all stop all insurance policies - including motor - in protest ?

There is no way this should be allowed to be foisted on the already-tapped-for-bailing-out-gamblers public.

later12 · 26-04-2011 10:10PM

BengaLover wrote: »

Silly question but does this affect only Quinn customers or is everyone being tolled?

Everyone with a non-life insurance policy, from your mobile phone to your house.

A big part of the moral hazard here is that in Ireland, insurance is compulsory for those with a car or a mortgage. Those people will see this as a further income levy, which the FG government promised would not arise.

In Ireland, also, we have an unfortunate habit of bailing out insurance companies - none has ever failed its customers to my knowledge - and this is the price we pay.

The bottom line is that saving Quinn would not be profitable for a private enterprise like Liberty Mutual, there is a good reason why they are unwilling to stump up the cash, and there is no reason why we should assume that we are very different.

touts · 27-04-2011 07:33AM

later10 wrote: »

Everyone with a non-life insurance policy, from your mobile phone to your house.

A big part of the moral hazard here is that in Ireland, insurance is compulsory for those with a car or a mortgage. Those people will see this as a further income levy, which the FG government promised would not arise.

In Ireland, also, we have an unfortunate habit of bailing out insurance companies - none has ever failed its customers to my knowledge - and this is the price we pay.

The bottom line is that saving Quinn would not be profitable for a private enterprise like Liberty Mutual, there is a good reason why they are unwilling to stump up the cash, and there is no reason why we should assume that we are very different.

Quinn has. Its customers are paying for its attempt to buy a bust bank.

If potential buyers "are unwilling to stump up the cash" then let the company go to the wall.

dan_d · 27-04-2011 10:15AM

At the end of all this, does anyone actually know how much Irish people are paying to the Gov? What is the sum total of taxes and levies? Why not have done with it and just call it all tax at whatever - 44% or whatever it is?

I'm not earning money right now, so I don't know.

later12 · 27-04-2011 10:26AM

touts wrote: »

Quinn has. Its customers are paying for its attempt to buy a bust bank.

This is not the case. Everyone with an insurance policy is paying for this. What they are paying for is not Sean Quinn's venture in CFDs, which was foolish, but a Government decision to cover a financial shortfall at the expense of the consumer and the non-Quinn Insurance customer.

It is acceptable that Quinn customers take a hit, based on the normal corporate model that exists throught a healthy capitalist society, although by selling its accounts that could be minimised.

What is not acceptable, is asking everybody else buying almost any form of insurance in Ireland to take a hit, perhaps for the next ten years at least.

later12 · 27-04-2011 10:34AM

Btw, from today's Independent. The Government have been collecting this levy all along, and if it had gone in to the ICF (Insurance Compensation Fund) as expected, there would be no need for this new levy. However, they've been spending it.

Revenue figures show that a total of €894.2m has been collected since 2001 under the non-life insurance levy scheme, which was first introduced in 1982.

There is currently €30m in the fund,

Also in the news today, a press release issued by Quinn yesterday evening said that he is appalled at how the consumer is being expected to bail out the company he no longer controls.

Amhran Nua · 27-04-2011 10:42AM

later10 wrote: »

However, they've been spending it.

Bahaha, this gets better and better. See this is why funds need ring fencing. If you pay a tax towards water it should be spent on water infrastructure.

ednwireland · 27-04-2011 11:02AM

Sources said the loss was based on a worst-case estimate of potential claims at Quinn Insurance, primarily in the UK business where premiums have risen sharply from the loss-making levels they were at before administrators were appointed to the company in March 2010.

from

http://www.irishtimes.com/newspaper/finance/2011/0427/1224295544718.html

does this mean the levy will primarily be bailing out the uk business ?

really unbeleivable

K-9 · 27-04-2011 12:42PM

Liam Byrne wrote: »

Have we even paid off FF's PMPA levy yet ?

It's beyond a joke that we are being forced to take on even more of other people's debts.

Well the PMPA levy was a FG/Labour decision, Frank Cluskey was in charge but I suppose it was a collective decision. AIB were also bailed out in 1985 by FG/Labour. Fairly sure this has been pointed out before.

Sierra Oscar · 27-04-2011 12:46PM

later10 wrote: »

Also in the news today, a press release issued by Quinn yesterday evening said that he is appalled at how the consumer is being expected to bail out the company he no longer controls.

He has some fucking cheek. Maybe if he built up a proper business in a legitimate manner rather than partaking in dodgy share deals and the like we wouldnt be in this mess in the first place.

Seems Quinn is still trying to play the "ah sure arent I only a modest man" card. It drives me mad to think that he used to (and still does it seems) go around saying that he is a common man who only bets a few pence each Tuesday for fun when reality he founded his Empire on the biggest Irish stock market gamble ever. Lets not forget that it is because of Sean Quinn that the "Golden Circle" of Anglo Irish Bank came into existence.

later12 · 27-04-2011 12:51PM

Sierra Oscar wrote: »

He has some fucking cheek. Maybe if he built up a proper business rather than partaking in dodgy share deals and the like we wouldnt be in this mess in the first place.

So what? Businesses fail all the time, its chief executives, its shareholders and its boards make daft and ruinous decisions all of the time. None of them expect to be bailed out, they expect that in the event of failure, they and their customers will take a hit. What Sean Quinn is saying here, is let it go to hell. What the government is saying is, no no, lets bail you out.

We wouldn't be in this mess if this government stood back and said, wait now, that's a private, non systemic enterprise - lets stay out of their affairs.

Noreen1 · 27-04-2011 12:56PM

oceanclub wrote: »

Here's the thing I don't get; other characters like Fingleton, Seanie, etc, rightly received almost universal condemnation for their actions. Yet I see multiple Facebook groups in support of this guy, with people frothing at the mouth in his defence. What makes this guy special?

P.

I haven't seen the facebook support pages you mention, and so far, I've avoided making any comment on the Quinn group.

I've met Sean Quinn, and had a couple of conversations with him. I don't presume to know him well, and haven't spoken to him since before the Millenium - I certainly have no insider knowledge of his business dealings.

However, I will say this.
IMHO, Sean Quinn came across as being a genuine, sincere person.
Despite acquiring enormous sums of wealth during the boom, he never pretended to be anything better than anyone else.

I remember meeting him one day, delivering cement to a hardware shop, in overalls and workboots, and jokingly commenting that I expected to see him dressed only in suits these days. His response was that he liked to get out in the lorry, and was happier in the yard than the office - and he was being completely sincere when he said that.

I suspect that it is this humble aspect of his character, and the fact that he never forgot his background, that earns him the level of support that he has.

As I said, I know nothing about the Quinn Groups difficulties. However, unless my judgement is very flawed (and it's usually pretty ok when judging character), then either Sean Quinn was led unknowingly into any questionable deals that the Quinn Group may have been involved in,- or he's changed his personality and character completely in 8 or 10 years.

I'm not a betting person - but I'd put money on the fact that, if the truth about the Quinn group ever comes out, Sean Quinn will not prove to be the villian that he is portrayed as in the media.

later12 · 27-04-2011 01:12PM

Noreen1 wrote: »

As I said, I know nothing about the Quinn Groups difficulties. However, unless my judgement is very flawed (and it's usually pretty ok when judging character), then either Sean Quinn was led unknowingly into any questionable deals that the Quinn Group may have been involved in,- or he's changed his personality and character completely in 8 or 10 years.

Aside from the CFD issue, I admire Sean Quinn's business mindset, you are quite right that he seems to be a decent guy in many respects. But the issue of diminished fault just doesn't stand up to examination. Quinn admits himself he was greedy, he admits that it was the lucrative nature of what he was embarking upon which kept him going back to the table for more, and doesn't appear to contest any summary of what happened with CfDs and Anglo, which by and large is very consistent.

later12 · 27-04-2011 01:14PM

By the way, lets not forget that Quinn is sticking around to face the music on his failure. He's speaking publicly, he's apologising for his wrongdoing. Derek Quinlan is in a mansion in Switzerland putting all of this behind him.

K-9 · 27-04-2011 01:20PM

Noreen1 wrote: »

I haven't seen the facebook support pages you mention, and so far, I've avoided making any comment on the Quinn group.

I've met Sean Quinn, and had a couple of conversations with him. I don't presume to know him well, and haven't spoken to him since before the Millenium - I certainly have no insider knowledge of his business dealings.

However, I will say this.
IMHO, Sean Quinn came across as being a genuine, sincere person.
Despite acquiring enormous sums of wealth during the boom, he never pretended to be anything better than anyone else.

I remember meeting him one day, delivering cement to a hardware shop, in overalls and workboots, and jokingly commenting that I expected to see him dressed only in suits these days. His response was that he liked to get out in the lorry, and was happier in the yard than the office - and he was being completely sincere when he said that.

I suspect that it is this humble aspect of his character, and the fact that he never forgot his background, that earns him the level of support that he has.

As I said, I know nothing about the Quinn Groups difficulties. However, unless my judgement is very flawed (and it's usually pretty ok when judging character), then either Sean Quinn was led unknowingly into any questionable deals that the Quinn Group may have been involved in,- or he's changed his personality and character completely in 8 or 10 years.

I'm not a betting person - but I'd put money on the fact that, if the truth about the Quinn group ever comes out, Sean Quinn will not prove to be the villian that he is portrayed as in the media.

I'd have sympathy and admiration for what he built up, I'm stunned and amazed he gambled it away and that is what he did:

Quinn's Anglo bet 'biggest cfd loss ever'

Quinn's Anglo bet 'biggest cfd loss ever'

The €3bn Sean Quinn acknowledged he lost on 'contracts for difference' has made will go down in history as among the most significant suffered by a private individual in the recent banking and stockmarket crash, according to leading international historians
of the stockmarkets and market participants, writes Eamon Quinn.

David Buick of financial bookie Cantor Fitzgerald said that the losses Sean Quinn made betting on a single share, Anglo Irish, through contracts for difference (CFDs) were "undoubtedly" the biggest an individual has suffered in the history of CFD trading.

Sean Quinn has disclosed that €2.5bn of the €3bn he lost was wagered through so-called leveraged CFD bets on Anglo Irish.

Leading market historian David Schwartz, who also writes on his stock-market trading activities for the Financial Times, said that Sean Quinn's overall losses were "eye-watering" regardless of whether they propelled him to near the top list of those losing most money in the stock market crash. Big investors such as Bill Gates and Warren Buffett would have lost more but over a longer period, he said.

Buick of Cantor said Sean Quinn's CFD losses "could not be easily be explained".

Cantor famously pulled back from CFDs and other leveraged investments in Ireland and the rest of the world in 2006 after it correctly called the risks, even though it lost many of its clients here at the time.

Commenting on the borrowings that led Sean Quinn to lose so much on CFDs, market commentator Russell Napier told the Sunday Tribune: "An investor's greatest asset is time but gearing turns that asset into a liability."

Unbelievable - Quinn insurance bailout levy

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