Central Bank claims it warned RSA of problems
The Central Bank says it spotted issues at insurer RSA's troubled Irish unit in August, and alerted the company.
It had come under fire in recent days for apparently failing to indentify problems with RSA's finances before they were revealed by the company itself last Friday.
As financial regulator the Central Bank is responsible for supervising the insurance sector as well as the banks. However, in a statement yesterday the Central Bank said it stepped up supervision of non-life insurers such as RSA earlier this year.
That included a routine inspection in August, where potential problems were spotted in a review of claims cases, the Bank said.
The concerns were then raised with RSA. "The Central Bank identified an issue with regard to delays in increasing case reserves on large claims in a timely manner and this informed the terms of an internal audit that RSA had already scheduled in relation to the same area," the statement said.
The August visit was one of eight on-site inspections over a two year period.
RSA had said the problems with its Irish unit – which involve an €83m shortfall that had to be plugged by the parent company last week – were found as a result of a routine internal audit in October.
The company has hired PWC to review the Irish operations and report back by the end of the year.
The Central Bank said it had a role setting out the terms of the PWC probe, and confirmed that the accountancy firm has been onsite in RSA's offices here since the week before last as part of this investigation.
No action has been taken against RSA, because of the company's "swift and prompt action" in relation to the problems at the Irish unit, and because of its on-going engagement with the Central Bank, the regulator said.