RSA dismisses top executives from Irish division over financial irregularities
Insurance group RSA has fired two senior officials at its Irish wing in relation to large loss and claims irregularities at the division.
RSA Ireland chief financial officer Rory O’Connor and Claims Director Peter Burke were dismissed yesterday, the UK insurer said in a statement this morning.
The sackings were conducted in parallel to an investigation by accountants PwC, which found some top brass at the division collaborated to by-pass financial controls
RSA Ireland Chief Executive Philip Smith resigned in November, while group chief executive Simon Lee stepped down last month amid the independent RSA investigation into the £200m (€240m) black hole at the Irish operation.
Martin Scicluna, RSA executive chairman, said the issues that emerged were completely unacceptable.
“The Board is now confident that the financial and claims irregularities were isolated to Ireland and do no reflect the quality of our control framework elsewhere,” he said.
“Our investigations have confirmed that the claims irregularities in Ireland were, in large part, the result of deliberate collaboration between a small number of executives there.”
The report found that there had been inappropriate collaboration involving a small number of senior executives in Ireland.
“Specifically, this evidence suggests that certain individuals acted in such a way as to intentionally circumvent parts of the existing control framework,” the report said.
“In particular the large claim reserving policy was circumvented. By so doing, financial records did not fully reflect the financial position of the business and reports made to Group and Regional Management were inaccurate and potentially misleading.
“This undermined the effectiveness of controls which placed significant reliance on senior management integrity.
RSA issued three profit warnings in less than six weeks amid a capital shortfall at its Irish unit. The Irish operation had to be shored up with an extra €235m in capital.
RSA shares were down 3.2pc at 10.16am this morning.
The insurer said an internal audit and testing from its newly appointed external auditor, KPMG, found the financial and claims irregularities were isolated to Ireland.
Both Mr O’Connor and Mr Burke were dismissed after the completion of appeal processes.