Terence Flanagan (Dublin North East, Independent)
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189. To ask the Minister for Finance if he has confidence in the Financial Regulator regarding the oversight of Royal and Sun Alliance's Irish operations; and if he will make a statement on the matter. [49168/13]

Michael Noonan (Limerick City, Fine Gael)
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To improve regulatory supervision and protect the Irish consumer, the Central Bank has, along with increased staffing levels, introduced a risk-based supervision framework, PRISM (Probability Risk and Impact SysteM). The framework establishes a new approach for supervisory engagement with regulated firms. As part of the framework the Central Bank of Ireland engages with firms at a level that corresponds to their impact category; the higher the impact, the higher the level of engagement. Engagement involves reviews, inspections and meetings, and the frequency and level of engagement is associated with the firms’ impactrating.

The Central Bank of Ireland has had an on-going programme of engagement with RSA Insurance Ireland (RSAII) since the implementation of PRISM, as it does with all high impact companies. This programme includes eight on-site inspections over a two year period and on-going meetings with key role holders such as the Chief Executive Officer, Chief Finance Officer, Chief Risk Officer, etc. The Central Bank carried out an onsite review of claims cases in RSAII in August 2013.

The Central Bank has informed me that it identified an issue with regard to delays in increasing case reserves on large claims in a timely manner and this informed the terms of an internal audit that RSAII had already scheduled in relation to the same area. RSAII brought the findings of this internal audit report to the attention of the Central Bank as soon as they became known. The terms of reference for a further multi-stranded investigation and review were outlined to the Central Bank as were the interim measures that the company planned in relation to the executive team.

The Central Bank will continue to liaise with RSA Ireland, PWC and other stakeholders to ensure that all matters identified are resolved to the Central Bank's satisfaction.