A PricewaterhouseCoopers probe has confirmed financial irregularities and “inappropriate collaboration” by managers at RSA Ireland, leading to the dismissal of that country’s chief financial officer and claims director.
RSA Ireland chief financial officer Rory O’Connor and claims director Peter Burke were dismissed “for their roles in relation to large loss and claims accounting irregularities”, the London-based insurer said in a statement today.
The British insurer has placed the blame for £72 million (Cdn$128.4 million) of losses on a “small number of senior executives” in Ireland after the PwC review into financial irregularities confirmed inappropriate collaboration among managers.
It also reported an additional £128 million (Cdn$228.8 million) of losses in reserves at the Irish business due to what it described as “adverse bodily injury claims trends” in 2013 and previous years.
According to the
Irish Times, PwC found evidence suggesting individuals intentionally circumvented parts of RSA’s controls, including its large-claim reserving policy.
No charges have been laid in connection with the dismissals or PwC investigation. (continued.)
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As a result, the financial records didn’t fully reflect the financial position of the business, and reports made to more senior management were “inaccurate and potentially misleading,” RSA said.
The insurer estimates that the total costs from the irregularities and reserve review will be £200 million (Cdn$368.3 million).
“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,” RSA executive chairman Martin Scicluna said in the statement. “We acknowledge that there are lessons to be learnt and we are tightening elements of our control and financial framework in response to these events.”
Last November, RSA revealed it had suspended O’Connor and Burke, as well as Ireland chief executive Phillip Smith, pending an investigation (see related
story). Smith later resigned that same month saying he was being made a “fall-guy.”
RSA also said an internal audit and testing from its newly appointed external auditor, KPMG, found the financial and claims irregularities were isolated to Ireland.
