Page last updated at 13:56 GMT, Thursday, 13 May 2010 14:56 UK

Quinn insurance 'was too cheap'

Matthew Elderfield is the Financial Regulatorin the Irish Republic
Matthew Elderfield is the Financial Regulator in the Irish Republic

The prices Quinn Insurance was charging in the UK were too low for the firm to meet potential claims, according to Ireland's Financial Regulator.

Matthew Elderfield told an Irish parliamentary committee that he was only able to reopen Quinn's UK motor insurance lines after prices went up.

The pricing changes were made by the court-appointed administrators now running Quinn Insurance.

The administrators have made proposals to reopen more Quinn lines in the UK.

Mr Elderfield was giving evidence to the Public Accounts Committee on Thursday.

Some of Quinn's rivals in the UK had long speculated that the premiums the firm charged for some business were too low to make financial sense.

Meanwhile a spokesman for the administrator Grant Thornton, confirmed that a there are "no plans at all" for Quinn Insurance to reopen its professional indemnity business in the UK.

Quinn provided indemnity insurance for many sole practitioner solicitors in the UK but that line of business has not been profitable.

Quinn Insurance was placed into administration earlier this year after the regulator raised concerns about its solvency.

The business is now up for sale and 900 staff will be made redundant.

The firm's problems stem from massive losses made when company-founder Sean Quinn made a stockmarket gamble on the now-failed Anglo Irish Bank.

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