The Quinn Insurance saga – the tale of the of the Irish P/C insurer that sold policies at 1/20th of the actuarial rate while it pledged its assets to support its corporate brethren – continues to amaze, with the latest twist being a push by the Anglo Irish Bank to buy the entity.
Quinn Insurance, of course, is owned by Quinn Group. Until the bank was nationalized, Quinn Group controlled Anglo, even as it owed the bank €2.8 billion. Quinn Insurance guaranteed much of that, which is why it lacks the assets to operate as an insurer.
Anglo figures if anyone else buys Quinn Insurance, it will have to write off another billion. And with the purchase, it will complete an organization chart that will look like an M.C. Escher painting.
But it won’t be easy for the financially stressed bank, as the Sunday Business Post Online drily notes:
One major hurdle is the future of Anglo. It recently submitted a business plan to the European Commission outlining a number of future options, but if Brussels recommends liquidating the bank in the medium term, it is unclear how it could pull off the Quinn deal.
And I guess I should also add that brokers who reluctantly placed business with Quinn have begun issuing chicken letters to protect their E&O. I mention this only to see how many of you click through to find out what a chicken letter is.