UK watchdog to investigate conduct at RSA's Irish arm

Britain's accounting watchdog said it would investigate the conduct of individuals who worked for RSA Insurance Ireland in the run-up to its bail-out by British parent RSA.

The Financial Reporting Council (FRC) said the investigation was related to "financial irregularities" at the Irish business. It did not identify the individuals or say if they still worked at the business.

The investigation will cover 2012 "and relevant prior periods as a result of the identification of issues within the claims and accounting functions announced by RSA Insurance Group plc at the end of 2013," the FRC said in a statement.

RSA has blamed a handful of executives at the Irish division for accounting irregularities that led to the group overstating its profits in Ireland and required it to tap shareholders for cash to plug the hole in its finances.

The British insurer was forced to inject 200 million pounds ($310 million) into its Irish unit.

RSA said the FRC's investigation was not into the company itself but into individuals who are members of accounting, auditing or actuarial professional bodies.

"We understand that the investigation will therefore cover members of these professions who were employed by RSA at the time. RSA Group will of course assist with these inquiries if requested to do so," the company said in a statement.

Philip Smith, former chief executive of RSA's Irish business who resigned in late 2013, weeks after the insurer informed the market about the irregularities, last month won a 1.25 million euro ($1.4 million) compensation payment for a constructive dismissal case.

RSA is appealing the award.

The FRC said it would cooperate with the Irish authorities as necessary, declining to elaborate.

Tags

RSA Insurance Ireland, FRC

Copyright Thomson Reuters. All rights reserved.