The President of the High Court has said he is shocked that the administration of Quinn Insurance Limited may now cost more than €1.6bn.
When the matter was before the court in October last year, Mr Justice Nicholas Kearns approved a potential pay out of €738m from the Insurance Compensation Fund to deal with the issues arising from the administration of Quinn Insurance.
However, today he was told the joint administrators believed they could need €1.65bn in a worst-case scenario.
The administrators believe the actual payout is likely to be between €1.1bn and €1.3bn.
The judge asked lawyers for the administrators if that meant the levy imposed on insurance policies since January could be extended for a very considerable number of years. Barrister Bernard Dunleavy said that was probably correct.
The 2% levy on home, motor and commercial policies came into effect on 1 January and was expected to last for 12 years.
Mr Justice Kearns said he wanted to hear in person from the administrators and from a representative of the Central Bank, which is responsible for regulating the insurance industry.
He said there was deep public concern when a set of estimated liabilities were replaced six or seven months later by a completely different set of liabilities.
He added that this was a truly shocking picture and something that required detailed explanation.
Justice Kearns directed that a representative of the Central Bank be requested to come before the court next Tuesday.
Lawyers for the administrators said there were a number of factors that had led to the increase in the amount being sought; including an increased, more pessimistic provision for claims, the euro weakening against sterling, and the decreased value in an investment.
Mr Dunleavy said there had been a culture in Quinn Insurance, particularly in the UK, of under-estimating and under-provisioning the reserves needed for claims and the administrators were adopting a more prudent approach.
He said what had changed since October was the administrators' estimate of the worst-case scenario.
Mr Dunleavy said the figures had been presented to the Department of Finance and that the Minister for Finance had assured the administrators that the Government would continue to fund the Insurance Compensation Fund to allow Quinn Insurance to meet its future costs.