The Central Bank of Ireland published a public statement confirming that it reprimanded Philip Smith, former Chief Executive Officer and Executive Director of RSA Insurance Ireland DAC, and disqualified him for 13 years from being concerned in the management of a regulated financial service provider. The sanction relates to his admitted participation in RSA Insurance Ireland DAC’s breach of Article 13(1)(a) of the European Communities (Non-Life Insurance) Framework Regulations 1994, which required the firm to maintain adequate technical reserves. The enforcement action concerns an “under-reserving process” for certain large loss claims under which claims handlers were prevented or delayed from recording their recommended reserve estimates on the firm’s claims database, resulting in understated reserves and a risk the firm might not have been in a position to pay claims. The Central Bank found Mr Smith became increasingly involved in approving reserve estimate changes from 2009, operated through frequent undocumented meetings and hard-copy records, and often did not approve recommended increases, including cases where reserve amounts recorded were materially below the recommended estimates. The under-reserving of 17 large loss claims contributed to a significant capital injection from RSA Insurance Group PLC in 2013 and, while the investigation found no evidence of actual loss, the Central Bank concluded the conduct posed a significant risk to policyholders. The 13-year disqualification took effect from 1 December 2025. Although the Central Bank considered Mr Smith’s participation merited a monetary penalty of EUR 120,000, it determined it could not impose a fine following analysis of sworn information on his financial circumstances and in light of statutory limits, including that a fine cannot be imposed if it would be likely to make a person bankrupt. The settlement concludes the Central Bank’s Inquiry into Mr Smith under Part IIIC of the Central Bank Act 1942, which had been scheduled for a substantive hearing to commence in January 2026.
Central Bank of Ireland 2025-12-12
Central Bank of Ireland disqualifies former RSA Insurance Ireland chief executive Philip Smith for 13 years over technical reserves breach
The Central Bank of Ireland reprimanded and disqualified Philip Smith, former CEO of RSA Insurance Ireland DAC, for 13 years due to under-reserving practices breaching European insurance regulations. Smith's actions delayed accurate reserve estimates, risking policyholders and necessitating a capital injection from RSA Insurance Group PLC. A EUR 120,000 fine was considered but not imposed due to Smith's financial circumstances and statutory limits.