The brief appearance before Mr Justice Nicholas Kearns in the High Court yesterday is part of the ongoing reporting back to the court of the joint administrators to Quinn Insurance.
That administration, by Michael McAteer and Paul McCann of Grant Thornton, is proceeding apace and the legal end of things is being handled by, amongst others, Jane Marshall, the head of McCann FitzGerald's restructuring and insolvency group.
While a summons naming PricewaterhouseCoopers had already been issued, yesterday's nod from the President of the High Court was the final step in the summons actually being served. As the court heard, the Minister for Finance, Michael Noonan, has also given the go-ahead for the case to proceed.
A new team of solicitors is now expected to organise an approach to the Commercial Court for the hearing of the case against PwC. In his October 2012 testimony to the Joint Committee on Finance, Public Expenditure and Reform, McAteer said that a review of reserves in mid-2010, five months after the administrators' appointment, concluded there was a reserves shortfall for 2009 of €400 million. As a result of the analysis, carried out by actuarial firm EMB for the administrators, actuarial provider Milliman, which provided services to Quinn Insurance, and its auditors, PwC, "revisited their draft 2009 reserves and ultimately moved to levels in line with those arrived at by EMB".
The effect of the review’s finding was to wipe out the insurance group’s profit reserves and raise questions as to whether it had ever been truly profitable.
Asked by Kieran O’Donnell of Fine Gael whether he was going to pursue €200 million that was gifted out of Quinn Insurance in 2008 to other companies owned by the Quinn family, McAteer said there was no point in chasing money that the party on the other side couldn’t repay.
That calculation obviously doesn't arise with PwC, nor with Milliman, whom Central Bank official Domhnall Cullinan told the committee was a respected firm that each year during the late noughties sent unconditional actuarial opinion reports about Quinn Insurance to the Central Bank. The administrators are stil examining whether a case should be taken against Milliman.
During the late noughties the actuarial reserves of the Central Bank were minimal to non-existent, in the sense that the number of adequately trained officials assigned to keeping an eye on the sector was well below what was required.
We’re all paying dearly for that now.
