The Central Bank of Ireland has reprimanded and imposed a €3.5 million penalty on RSA Insurance Ireland DAC for regulatory breaches related to large loss claims and accounting irregularities from 2009 to October 2013.
The central bank said the company failed to establish and maintain technical reserves in respect of all underwriting liabilities assumed by it. The company also failed to have robust governance arrangements and to have sound and adequate administrative and accounting procedures and internal control mechanisms, according to the central bank. RSA Insurance Ireland admitted these breaches.
The investigation also identified weaknesses in the company's accounting procedures and internal financial control mechanisms, which led to an understatement of €78.2 million in the company's technical reserves as at Sept. 30, 2013.
Furthermore, the investigation found that failures in RSA Insurance Ireland's corporate governance framework, particularly in its internal reporting structures, allowed the under-reserving of large loss claims to go undiscovered and unchecked for several years.