The Central Bank has opened an investigation into the former management of Quinn Insurance.

The bank said it will hold an inquiry to establish whether "persons concerned with management" of Quinn broke regulations. 

The insurance company collapsed and was placed into administration by the Central Bank in 2010. 

A levy was placed on all insurance policies in Ireland to help pay for the shortfall caused by the financial crisis within Quinn and the insurance part of the company was sold to Liberty.  

The Central Bank has not specified which contraventions it is investigating, however, it is understood that the breach of regulations relates to the use of assets, which should have been available to meet claims of motorists, being used to guarantee debts in the wider Quinn group.

Quinn Insurance entered a settlement agreement with the Central Bank on the issue in 2013.

Now the bank is investigating individuals involved in the management of Quinn Insurance instead of the company.

In 2013 the bank said some of Quinn's subsidiaries, on which Quinn Insurance was dependent for its technical reserves, entered into "significant financial guarantees".

Quinn Insurance was blind to these guarantees; its board never had the opportunity to consider them or their implications. The controls to manage the firm's subsidiaries were evidently deficient.  

The development resulted in a shortfall in assets of €890m for Quinn Insurance in its 2009 accounts. 

The bank does have the power to administer sanctions where a breach of regulations is found. 

Members of the Central Bank's inquiry team will decide how to proceed with the investigation. 

It said "an inquiry into suspected prescribed contraventions is a serious matter" and the inquiry will determine if there was a breach of regulations.