“For over three and a half years, in his roles as chief financial officer and executive director on the board of RSAII (RSA Ireland Insurance DAC), Mr O’Connor knowingly participated in the systematic under-reserving of large loss claims, actively facilitated the on-going operation of the under-reserving, and concealed it from the Central Bank through the provision of inaccurate financial information.”
Those were the words of enforcement and anti-money laundering director Seána Cunningham when the Central Bank of Ireland announced that Rory O’Connor – who was with the insurer until January 2014 – has been disqualified from being a person concerned in the management of a regulated financial service provider for eight years and four months and fined €70,000 for his admitted participation in RSAII’s breach of financial services law.
In December 2018, following a separate investigation, the RSA unit was slapped with a €3.5 million penalty for its failure to maintain sufficient technical reserves from February 2010 to the end of September 2013. The Central Bank’s probe in respect of RSAII found that deliberate and wrongful under-reserving of large loss claim reserve estimates resulted in incomplete and inaccurate information being relied on in the calculation of the company’s technical reserves.
It previously came to light that the claim reserve estimates on RSAII’s claims database were understated in the sum of approximately €29 million as of September 30, 2013.
As for O’Connor, he was found to have knowingly and actively participated in the accounting scandal, and the regulator determined that his misconduct merited a 12-year disqualification period and a €100,000 penalty but the amounts were reduced in accordance with the settlement discount scheme. It was noted that the ex-CFO admitted his involvement in the under-reserving process, and that he cooperated during the investigation.
Meanwhile Cunningham asserted: “The Central Bank takes enforcement action against senior individuals in regulated financial services firms in order to hold them accountable where they have participated in serious or significant breaches of regulatory requirements.”
