The Central Bank has fined former RSA Insurance Ireland chief financial officer Rory O'Connor €70,000 and disqualified him from working in a regulated financial firm for more than eight years over his role in an accounting scandal that emerged in 2013.
It follows the regulator imposing a €3.5 million penalty on RSA Insurance Ireland (RSAII) in late 2018, after the British company was found to have deliberately and wrongfully set aside less money than was needed to cover large insurance loss claims between 2009 and 2013. The exercise served to artificially inflate profits.
The Central Bank said the company’s claim reserves were understated by €29 million at one stage.
“The Central Bank’s investigation in respect of Mr O’Connor, who held the positions of executive director and chief financial officer in RSAII, found that he knowingly and actively participated in RSAII’s failure to maintain sufficient technical reserves through his involvement in the under-reserving of large loss claim reserve estimates,” the bank said in a statement on Thursday.
Mr O’Connor participated “along with certain other individuals” in undocumented meetings where large loss claim reserve estimates were “deliberately and wrongfully under-reserved” and provided “misleading financial information” to the Central Bank, it said.
The former RSAII executive admitted his participation in the breach at an early stage of the investigation, and co-operated with the Central Bank to “an exemplary degree”.
The Dublin-based insurer’s British UK parent, RSA Insurance Group, injected €423 million of cash between 2013 and 2015 into its Irish subsidiary, which had previously been the largest general insurer in the State.
This was to fill a hole left in the Irish unit’s balance sheet by the debacle and to shore up its finances.
Mr O'Connor was one of three executives suspended by RSAII in 2013 after financial issues emerged. RSAII settled a dispute in 2016 with Philip Smith, the former chief executive of the company, who had been awarded €1.25 million a year earlier by the Employment Appeals Tribunal (EAT) relating to his acrimonious departure in the wake of the accounting controversy.
Mr O'Connor and the third man, former claims director Peter Burke, also took cases against RSAII to the EAT after they were fired, but both were settled without the need for a hearing.