The Central Bank has reached a settlement with Quinn Insurance, waiving the financial penalty "in the public interest".

The maximum fine regulators could have imposed was €5 million. The Central Bank said there were a number of breaches by the firm that merited such a fine, including a lack of adequate procedures or controls to manage assets representing its technical reserves, and failing to maintain adequate solvency margins.

However, because the firm is under administration and is reliant on the Insurance Compensation Fund, any fine imposed would have to be financed from the fund and ultimately paid by contributions made by non-life insurers and the levy imposed on all Irish motor and home policyholders.

The bank said the “wholly exceptional circumstances” warranted waiving the monetary penalty entirely.

The firm has been reprimanded, the bank said.

This is the second time Quinn Insurance has had enforcement action taken against it, with a 2008 settlement agreement for breaches by the firm of regulations that resulted in a fine of €3.25 million.

“This is a repeat offence which is a significant aggravating factor,” the head of the Central Bank’s enforcement division Derville Rowland said.

“We know from recent experience that weak controls can cause firms to fail and result in systemic harm. For this reason, the Central Bank will not tolerate weak controls or governance within a firm and will take enforcement action against the firm or responsible senior management when problems arise. The Central Bank will not hesitate to impose serious penalties on firms and individuals in order to deter others from similar poor behaviour.”