British insurer RSA is set to be fined up to €5 million by the Central Bank in relation to financial irregularities that emerged at the business in 2013.
However, this could be reduced to €3.5 million if the Central Bank deems that RSA has co-operated with its investigation and taken sufficient steps to remedy the situation.
The Central Bank has been conducting an investigation into this matter and its findings are expected later this year. It is thought likely that it will levy the maximum fine possible under legislation pertaining at the time of the irregularities.
Last year, the Central Bank imposed the maximum €5 million on Ulster Bank for a series of IT issues that meant customers couldn’t access their accounts for long periods in 2012.
This was reduced to €3.5 million as Ulster Bank co-operated fully with its investigation.
Tribunal case
The issues relating to the irregularities at RSA's Irish business in 2013 will take centre stage today when a case brought by Philip Smith, former chief executive of the Dublin-based unit, begins at the Employment Appeals Tribunal.
Mr Smith is seeking compensation for alleged constructive dismissal with no notice. He will argue he was the fall guy for the problems at RSA Ireland and that the group knew about the issues in the business here. In a break with usual procedure, the tribunal has set aside all five days this week to hear the case. Mr Smith’s evidence is expected to last for at least two days. This will include him being cross-examined by RSA.
Mr Smith left RSA in controversial circumstances in November 2013 after certain financial issues emerged at the UK group’s Irish subsidiary. At an initial hearing in Dublin in January, RSA said it would fight the case “tooth and nail”.
Employment with RSA
Mr Smith’s employment with RSA began on January 1st, 2006, and ceased on November 28th, 2013. He was paid a gross monthly salary of €34,000.
On November 8th, 2013, RSA suspended Mr Smith pending the outcome of an investigation into issues in the Irish claims and finance functions identified during a routine internal audit. On November 28th, RSA revealed that Mr Smith had resigned and said no severance payment had been made.
Losses relating to the Irish accounting scandal have amounted to £300 million (€416 million) to date and the insurer has also injected capital into its Irish unit to ensure its solvency ratio was in excess of 200 per cent. Several senior executives have left RSA since the Irish issues emerged.
