Warning over improper dealing

IMPROPER dealing from companies based in the IDFSC in Dublin will not go unpunished, the head of the Irish Financial Services Regulatory Authority (IFSRA) warned yesterday.

In his first remarks since the regulator began investigating the reinsurance firm General Re, the IFSRA chief executive, Liam O’Reilly, said there was no room in Ireland for any improper activity.

Since last August, investigators from IFRSA and regulators in Australia and the United States have been probing the Dublin branch of General Re and its subsidiary, Cologne Re.

The investigators have targeted the company’s “advanced solutions group” which is based in the IFSC.

The group sold so-called “finite risk” products, which allow companies to take out insurance against a particular risk and transfer it off their balance sheet. Reinsurance products are completely legitimate, so long as risk is genuinely transferred.

The probe follows a lengthy inquiry from the Australian Prudential Regulation Authority (ARPA) into the €3 billion collapse of financial services firm HIH in 2001. APRA claims that a HIH subsidiary, FAI, bought a number of finite risk products from General Re.

As a result of the ARPA inquiry, several executives from General Re were banned from working in Australia’s financial services market.

Two of these individuals work in General Re’s Dublin branch.

They are appealing the decision.

IFRSA has no power to ban the two individuals concerned from working in Ireland, but Mr O’Reilly said he was satisfied that the company was taking the necessary corrective action.

It is not known if the company is taking disciplinary actions against the employees.

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