Former Quinn Insurance director Liam McCaffrey settles with Central Bank

Former Quinn Insurance Limited (QIL) director Liam McCaffrey reached a settlement with the Central Bank last December, having been under investigation for allegedly being involved in transactions that ultimately undermined the financial standing of the business.

The settlement was disclosed in the Central Bank’s annual report, published on Wednesday.

A spokeswoman for the bank declined to comment on the terms of the settlement or say whether the organisation may also reach a settlement agreement with the other subject of the inquiry, Kevin Lunney, former general manager of QIL. A spokesmen for both men also declined to comment.

The Central Bank ordered in 2015 that an inquiry be set up to investigate allegations that Mr McCaffrey, former chief executive of Quinn Group and one-time director of QIL, and Mr Lunney had been involved in eight subsidiaries of the company providing guarantees against loans to the wider Quinn Group – without the knowledge of the insurer’s board of investment committee.

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The Quinn Group loans, arranged between 2005 and 2007, amounted to €1.2 billion.

The guarantees undermined the ability of QIL to rely on the subsidiary assets to form part of a reserve of money set aside to meet insurance claims, if necessary, the inquiry heard in public sessions 12 months ago. QIL fell into administration in March 2010 after a hole was discovered on its balance sheet, and was taken over a year later by Boston-based Liberty Mutual Group.

Both men said that they were unaware of the nature of the guarantees at the time of the Quinn Group refinancing as they signed reams of documents giving rise to the deals.

Quinn Industrial Holdings

Mr McCaffrey and Mr Lunney are top executives at Quinn Industrial Holdings (QIH), a cement-to-plastics conglomerate rescued from the implosion of businessman Sean Quinn’s business empire following the crash and now under the control of three US investment funds.

The Central Bank settlement was reached within three months of Mr Lunney being subjected to a kidnapping and violent attack amid a long campaign of intimidation against QIL and its top executives.

“Given the circumstances arising for Mr McCaffrey at the time we reached the settlement, which were unrelated to the Central Bank’s Inquiry, the Central Bank will not be making any further comment,” a spokeswoman for the bank said.