DUBLIN (Reuters) - The head of insurer RSA’s (RSA.L) Irish unit resigned on Thursday, saying he had become the “fall-guy” in an investigation into allegations of accounting problems at the business.
Britain’s largest general insurer is looking into alleged irregularities and accounting issues at the unit going back at least two years after an internal audit of the business triggered a second profit warning in a week.
“I am certain that when the recent issues arose, that I quickly became the ‘fall-guy’ for all issues, making it impossible for me to achieve justice and fairness,” Philip Smith, 45, said in an emailed statement.
“My family and I have been truly traumatised by recent events and I have taken this most difficult of decisions in the best interests of my family. Resigning not only eases the stress and strain on them, but also offers me the opportunity to pursue justice outside the current flawed process.”
RSA confirmed it had received Smith’s resignation which was “effective immediately”. It said he had not received a severance payment.
The insurer also said on Thursday it had started the search for a new candidate to run its Irish arm. RSA’s chief executive for UK and western Europe Adrian Brown has stepped in as acting CEO of RSA Ireland.
A spokeswoman for RSA would not comment beyond the company’s statement because the issue had become “a legal process”.
Smith was suspended by RSA earlier this month along with the Irish unit’s chief financial officer Rory O‘Connor and claims director Peter Burke pending the outcome of the review.
RSA said no findings had been made against any individuals at the time.
Shares in the insurer tumbled after its disclosure that it had uncovered “issues” at its Irish operations and had suspended the three top executives.
RSA’s chief financial officer, Richard Houghton, said the company was examining “the booking of large losses within claims and the timing of the recognition of earned premiums” and that the issue dated back at least two years.
RSA has appointed auditor PricewaterhouseCoopers PWC.UL to review the Irish operation’s financial and regulatory processes and controls and its supervision by the group. It has injected 100 million euros of fresh capital into it.
Ireland’s central bank has also launched an investigation.
The company has already warned that the problems at the Irish unit means RSA’s 2013 operating result will be 70 million pounds ($112 million) lower than previous market expectations.
Ireland accounts for a relatively small part of RSA, making up just 4 percent of group premiums last year, when the group reported an operating profit of 684 million pounds.
In February RSA cut its annual dividend by 20 percent, to 7.3 pence a share for last year, after complaining of poor returns from its bond investments.
Additional reporting by Conor Humphries; Editing by Greg Mahlich and Pravin Char