FORMER RSA IRELAND financial officer Rory O’Connor has been fined by a UK watchdog after it was found that he approved inaccurate financial statements.
The UK Financial Reporting Council (FRC) also fined two other former RSA Ireland employees, actuaries Martin Ryan and Gerard Bradley.
The FRC was investigating financial irregularities at the company “in respect of the year ended 31 December 2012 and relevant prior periods”.
UK insurance giant RSA was forced to inject £200 million into RSA Ireland after it was discovered that accounting irregularities led to the group overstating its profits in Ireland.
One of the main issues was that not enough cash had been set aside to deal with large claims. RSA ended up contributing about €423 million to its Irish arm between 2013 and 2015.
The FRC’s investigation was not into the company itself but into individuals who are members of accounting, auditing or actuarial professional bodies.
Former chief financial officer O’Connor, who is a member of the Chartered Institute of Management Accountants (CIMA), was suspended when news of the scandal broke in November 2013 before being sacked two months later.
Breach of integrity
The FRC investigation found that, “among other things”, he breached principles of integrity and objectivity when he approved “materially inaccurate financial statements” of RSA Ireland for the three years through 2012.
O’Connor admitted that his conduct “fell significantly short of the standards reasonably to be expected of a member of CIMA”. He has been excluded from the organisation for three years.
He was ordered to pay a fine of £50,000, which was reduced to £35,000 “after mitigation and a settlement discount”, and contribute £18,000 to the watchdog’s executive counsel’s costs.
Former RSA Ireland chief actuary Martin Ryan was found to have breached “the core principles of competence, care and compliance” when he signed inaccurate statements of actuarial opinion and submitted them to the Central Bank of Ireland.
Strong signal
Ryan was fined £145,000, which was reduced to £101,500 after a mitigation and a settlement discount, as well as being ordered to contribute £11,000 to the watchdog’s executive counsel’s costs.
Ryan was also ordered not to act as a ‘signing actuary’ for three years “or undertake certain roles in the Republic of Ireland”.
Former RSA Ireland actuary Gerard Bradley was found to have breached the principle of compliance “by his failure to whistle-blow and/or provide sufficient challenge regarding the operation of an inappropriate claims reserving practice (at RSA Ireland)”.
He was fined £70,000, reduced to £45,000, and ordered to contribute £3,500 to the counsel’s costs.
Gareth Rees, executive counsel the FRC, said that the sanctions “reflect the seriousness of the failings by these individuals and will send a strong signal to the accounting and actuarial professions of the importance of upholding high standards of professional conduct”.
Written by Paul O’Donoghue and posted on Fora.ie
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