Probe of RSA’s Irish Division at ‘Advanced Stage’, Says Irish Central Bank

By | February 17, 2015

Ireland’s central bank said its probe into an accounting scandal at RSA Insurance Group plc’s Irish division is moving toward a conclusion and decisions on possible sanctions will be made once it’s completed.

“An investigation into historical claims-reserving practices at RSA is ongoing and is at an advanced stage,” Nicola Faulkner, a spokeswoman for the Irish regulator, said by e-mail. “Once concluded, decisions regarding enforcement proceedings will be made.”

Faulkner declined to comment further. Officials for the London-based insurer weren’t immediately available to comment.

The central bank began its investigation after RSA revealed in November 2013 it was probing the timing of Irish reserve provisions for insurance claims and whether the unit reported the amount of premiums paid to the company too early. The company injected 200 million pounds ($307.6 million) into the division to shore up its capital following the scandal.

RSA’s former Ireland Chief Executive Officer Philip Smith resigned in November 2013, saying he was being made a “fall guy.” He is currently fighting a constructive dismissal case in Ireland’s Employment Appeals Tribunal, where a hearing is due to start on March 9.

The unit’s Chief Financial Officer Rory O’Connor and Claims Director Peter Burke were later fired after a company probe concluded that some executives had made reports that were “inaccurate and potentially misleading.”

Under Irish laws introduced in 2013, the central bank can fine firms as much as 10 million euros ($11.4 million) or 10 percent of revenue for regulatory breaches. It may fine individuals as much as 1 million euros.

–With assistance from Sarah Jones in London.

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