Minister for Finance Brian Lenihan has defended the decision by the Financial Regulator to appoint administrators to Quinn Insurance.
Mr Lenihan said Matthew Elderfield was acting 'in the proper performance of his functions'.
The Quinn Group had yesterday described the regulator's action as 'pre-emptive, aggressive and unnecessary'.
The Minister told the Dáil this afternoon that the regulator had concerns that the company had significantly breached solvency ratios and that its subsidiaries had entered into a series of agreements, which had reduced its assets by €448m.
He said the Regulator was concerned that Quinn Insurance had failed to make adequate provisions for its debts, including prospective liabilities.
The Minister said Quinn Group Chairman Jim Quigley had told the Regulator last Wednesday of the guarantees given by some subsidiaries.
It emerged that four subsidiaries gave guarantees between 2005 and 2007. Four other subsidiaries gave guarantees in 2008, bringing the total guaranteed sum to €1.2bn.
The effect of these was to reduce the assets of Quinn Insurance by €448m and to wipe out what the Minister called their solvency cushion.
Mr Lenihan said the fact these guarantees had not been revealed for some time had raised the gravest concern about governance and accounting issues.
He also assured policy-holders that Quinn Insurance was in a position to meet any claims arising from its policies.
