RSA's Irish employees face fines up to €1m over law breaches
IRISH employees of insurer RSA could be personally hit with fines of up to €1m each, in the event that they are found to have been in breach of financial services laws.
And it has transpired that the insurer itself could face up to a €35m fine from the Central Bank, as the truth of what really happened at the insurance giant's troubled Irish division begins to emerge.
New legislation passed last August gave the Central Bank a range of enhanced powers, including the right to personally fine individuals up to €1m.
RSA has already delivered a damning condemnation of the Irish executives it claims were involved in the claims irregularities that created a €240m black hole in its Irish division.
The insurance giant announced that it had fired its Irish chief financial officer Rory O'Connor and its claims director Peter Burke last week "for their roles in relation to large loss and claims accounting irregularities".
The insurer went on to state that the irregularities discovered were largely a result of "deliberate collaboration" between a "small number of executives".
The RSA group finance director Richard Houghton pointed out that there was a link between the irregularities and some employees' bonuses.
"To the extent that the performance of the Irish business was overstated ... bonuses would have been greater than they otherwise would have been," he said.
The regulating body for chartered accountants in Ireland, Carb, which has the power to exclude people from its profession, told the Sunday Independent that it was also "monitoring" the situation.
It said it was working closely with the Financial Reporting Council in the United Kingdom and with the Irish Auditing and Accounting Supervisory Authority, as well as with the Central Bank.
RSA itself, and not just its executives, is also on the line. The Central Bank has the power to fine it up to €10m or 10 per cent of its annual turnover -- which in RSA's case would equate to about €35m.
If a severe breach is found, the Central Bank also has the power to suspend or revoke a company's authorisation to trade.
Carb can also impose substantial fines.
It is not yet clear whether RSA is under investigation in the UK by the Central Bank's British counterpart, the Financial Services Authority.
Under British law, it is illegal for the Financial Services Authority to give details of ongoing investigations.