Sanctions against former Chief Financial Officer and Actuaries of RSA Insurance Ireland Limited

News types: Investigations

Published: 22 February 2017

PN 10/17
The former Chief Financial Officer and two former actuaries of RSA Insurance Ireland Limited (RSAII) have admitted misconduct and agreed to fines and other sanctions following the conclusion of the Financial Reporting Council’s (FRC) investigation into financial irregularities at  the company in respect of the year ended 31 December 2012 and relevant prior periods.
Mr Rory O’Connor, former Chief Financial Officer of RSAII and a member of the Chartered Institute of Management Accountants (CIMA), has admitted that his conduct fell significantly short of the standards reasonably to be expected of a Member of CIMA, by among other things breaching the Fundamental Principles of Integrity and Objectivity when he approved materially inaccurate financial statements of RSAII for the financial years ended 31 December 2010 to 31 December 2012 (inclusive).

The following terms of settlement have been agreed:
  • Exclusion from CIMA for 3 years;
  • A Fine of £50,000 reduced to £35,000 after mitigation and a settlement discount; and
  • A sum of £18,000 to be paid by Mr O’Connor as a contribution to the Executive Counsel’s costs.
Mr Martin Ryan, former Chief Actuary of RSAII and a member of the Institute and Faculty of Actuaries (IFoA), has admitted that his conduct fell significantly short of the standards reasonably to be expected of a Member of the IFoA, by among other things during the financial years ended 31 December 2009 to 31 December 2012 (inclusive) breaching the core principles of Competence and Care, and Compliance when he signed inaccurate Statements of Actuarial Opinion and submitted them to the Central Bank of Ireland (or Financial Services Regulatory Authority).

The following terms of settlement have been agreed:
  • An Order that Mr Ryan be ineligible for 3 years for a practising certificate issued by the IFoA;
  • A Condition that Mr Ryan shall not, for 3 years, act as a Signing Actuary or undertake certain roles in The Republic of Ireland (including Pre-Approval Controlled Functions and certain Controlled Functions);
  • A Fine of £145,000, reduced to £101,500 after mitigation and a settlement discount; and
  • A sum of £11,000 to be paid by Mr Ryan as a contribution to the Executive Counsel’s costs.
Mr Gerard Bradley, a former Actuary of RSAII and a member of the IFoA, has admitted that his conduct fell significantly short of the standards reasonably to be expected of a Member of the IFoA, in that during 2009 and 2010 he breached the Core Principle of Compliance by his failure to whistle-blow and/or provide sufficient challenge regarding the operation of an inappropriate claims reserving practice within RSAII.

The following terms of settlement have been agreed:
  • A Fine of £70,000 reduced to £45,500 after mitigation and a settlement discount;
  • A Reprimand; and
  • A sum of £3,500 to be paid by Mr Bradley as a contribution to the Executive Counsel’s costs.
Gareth Rees QC, Executive Counsel to the FRC, said,

“These significant sanctions, including a period of exclusion and substantial fines, 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. These sanctions will also serve to protect the public and contribute to the maintenance of public confidence in the accountancy and actuarial professions.
It is also notable that these are the first sanctions imposed on actuaries pursuant to the FRC Actuarial Scheme, and they demonstrate the importance of compliance with the core principles of the Actuaries Code, including the obligation to speak up about, and challenge, improper conduct.”

The settlements have been approved by a legal member of the independent Tribunal Panel.

Notes to editors:

  1. The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.  We are the UK competent authority for audit and set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent enforcement arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.

  2. In relation to enforcement matters, the FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. In brief, the stages of the disciplinary process under the Accountancy Scheme are:

  • Decision to investigate
  • Investigation
  • Decision whether to bring enforcement proceedings against Member Firm or Member and, if so decided, referral to Disciplinary Tribunal
  • Tribunal hearing
  • Determination and imposition of sanction and/or costs orders

Under the Accountancy Scheme the FRC can start a disciplinary investigation in one of two ways: (i) the professional bodies can refer cases to the FRC; and (ii) the FRC may decide of its own accord to investigate a matter. The Conduct Committee will consider each case identified or referred to it and decide whether or not the criteria for an investigation are met.

The criteria are specified in paragraph 5(1) of the Accountancy Scheme. A Member or Member Firm shall be liable to investigation under this Scheme only where, in the opinion of the Conduct Committee the matter raises or appears to raise important issues affecting the public interest in the United Kingdom and there are reasonable grounds to suspect that there may have been Misconduct or it appears that the Member or Member Firm has failed to comply with any of his or its obligations under paragraphs 14(1) or 14(2) of the Scheme.

Investigations are conducted by Executive Counsel and the Enforcement division.

Explore the topics