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FRC launches probe into financial irregularities at RSA Insurance Ireland

THE accounting watchdog has launched an investigation into the conduct of certain individuals in connection with financial irregularities at RSA Insurance Ireland.

The Financial Reporting Council said the investigation will cover the year ended 31 December 2012 and relevant prior periods as a result of the identification of issues within the claims and accounting functions announced by parent RSA at the end of 2013.

More than £70m in financial and claims irregularities were discovered in the Irish division of RSA, which blamed a handful of executives within the division for the irregularities, which led to a profit warning.

PwC were called in to review the insurer’s financial controls and processes. The group-wide review found it’s controls to be appropriate, while additional assurance testing by auditors KPMG, and its internal audit division, found the irregularities to be isolated to Ireland.

The investigation will be an unwelcome distraction for RSA’s new group chief financial officer Scott Egan, who was appointed on the same day the probe was announced. He replaces Richard Houghton, who served as RSA’s finance chief for three years during a tumultuous period for the insurer.

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