RSA report highlights local weaknesses in the way its policies were implementedThursday 09 January 2014 18.25
Insurer RSA has said a review of its businesses by accountants PwC concluded that accounting irregularities at the company were confined to its Irish business and did not amount to a group-wide problem.
The report was commissioned by RSA into financial irregularities at its Irish subsidiary.
It concluded that they resulted from weaknesses in the way its policies were implemented locally rather than from failures of governance at group level.
The PwC report focuses on the way its policy on large losses resulting from claims was applied in Ireland. It also finds that there was "inappropriate accounting" for income in some circumstances.
It says there were "no obvious indicators" of the issues in Ireland that were ignored higher up within RSA.
The financial irregularities at its Irish subsidiary cost the insurer £200m and led to the departure of its chief executive.
The company said today that a local programme of remediation has already begun and it continues to work with the Central Bank.
It also said that after an internal disciplinary process, RSA Ireland's CFO Rory O'Connor and the RSA Ireland Claims Director, Peter Burke, have been dismissed for their roles in relation to large loss and claims accounting irregularities.
RSA Ireland chief executive Philip Smith resigned in November last year saying the process had a "predetermined outcome" and that RSA had sought to make him a "fall guy".
The company's group chief executive Simon Lee resigned in December following the revelation of the massive losses in Ireland and was replaced on an interim basis by RSA's UK CEO Adrian Brown.
RSA also said today that it had suffered further weather losses from an ice storm in Toronto in December and severe flooding in the UK and Ireland over the Christmas period. "It is too early to quantify losses from these events but they will impact the 2013 result," the company cautioned.
The Central Bank said today that it is likely to be examining issues related to RSA in Ireland for several months to come.
"The Central Bank's examination of these issues is likely to continue for some months to come and it is unlikely to be in a position to comment further until that process is complete," the bank said.