Catalina Ireland is to acquire Quinn Insurance's portfolio of UK and European legacy liabilities, it confirmed on Wednesday.

Catalina, which is a subsidiary of Bermuda-based Catalina Holdings, said it had signed a definitive agreement with Quinn Insurance, which is under administration.

The administrators of Quinn Insurance Michael McAteer and Paul McCann of Grant Thornton said the sale "represented a significant step towards completing the administration of the group. "

The portfolio transfer will be subject to regulatory approval in Ireland and the approval of the High Court of Ireland. As part of the transfer process, Catalina will inject required capital into Catalina Ireland. The portfolio transfer process is expected to complete during the second half of this year.

Total assets of Catalina pro forma for this transaction will be in excess of $3.3 billion, the group said.

“The joint administrators are confident that this transaction, if approved by the High Court, will go some considerable way towards ensuring that the final cost of the Quinn Insurance Limited administration will be below the previously estimated guide of up to €1.3billion,” a spokesman for the administrators said.

The subject portfolio had gross and net insurance liabilities of €463million and €461million, respectively as of the end of September 2014.

Quinn Insurance, established by former billionaire businessman Sean Quinn, was put into administration in 2010 following an application by the then financial regulator Matthew Elderfield after he expressed serious concerns about how the group, once the country's largest insurer, was being run.

When the group was placed into administration it was estimated that it would cost the taxpayer €738 million, but that figure has since mushroomed after the administrators discovered significant under-provisioning for claims.

The administration of the Quinn Insurance company is expected to end in 2016.