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(Reuters) — The head of Italy's insurance industry watchdog, ISVAP, is under investigation as part of a probe into the takeover of insurance company Fondiaria-Sai S.p.A. by rival Unipol Gruppo Finanziario S.p.A, Italy's financial police said Tuesday.
Financial police from Turin said in a statement the Rome offices of ISVAP and the home of its head, Giancarlo Giannini, were being searched. The police said that between 2009 and 2011 there had been "failures and delays" in supervising the company.
On Aug. 2, as part of the same investigation, the offices of Fondiaria-Sai in Turin and Milan, Italy, were searched and the executive committee of the group's board placed under investigation for false accounting and obstructing regulators.
Unipol had agreed in January to rescue loss-making Fondiaria, whose solvency ratio — a measure of financial health for insurers — had fallen below regulatory standards.
At the time, ISVAP was criticized for being slow in reacting to Fondiaria's troubles.
ISVAP was not immediately available for comment.
Fondiaria, which has 8 million customers, has been losing money since 2009, but it was only in 2011 that the regulator said the company needed to be recapitalized.
Mr. Giannini has responded to criticism that the watchdog did not spot Fondiaria's financial troubles early enough by blaming auditors and administrators at Fondiaria for failing to carry out proper checks.
Salvatore Ligresti, the Sicilian patriarch who used to control Fondiaria, is also being investigated for suspected market irregularities.
The merger of Unipol and Fondiaria is due to take effect at the beginning of next year.