Inquiry Guidelines and Outline of Administrative Sanctions Procedure

On 6 November 2013, the Central Bank issued Inquiry Guidelines setting out the procedures to be followed by the Central Bank when holding an inquiry under the Administrative Sanctions Procedure.

Following a public consultation in May, the Central Bank also issued an updated version of the Outline of the Administrative Sanctions Procedure which provides a general overview of the Administrative Sanctions Procedure.

Please click here to view the Inquiry Guidelines and the revised Outline of the Administrative Sanctions Procedure in full.

Guidelines on Preparing for Solvency II

On 4 November 2013, the Central Bank published its long awaited "Guidelines on Preparing for Solvency II" (the Guidelines) which reflect the EIOPA Guidelines published in October. The purpose of the Guidelines is to assist insurance companies in taking active steps towards implementing certain key elements of Solvency II.

The Guidelines cover the following key areas of Solvency II: 

  • Systems of Governance;
  • Forward-looking assessment of own risks; 
  • Submission of information to the Central Bank; and
  • Pre-application of internal models.

Please click here to view the Guidelines in full.

Consultation on Requirements for Reserving and Pricing for Non-Life Insurers and Reinsurers

The Central Bank has published a Consultation on Requirements for Reserving and Pricing for Non-Life Insurers and Reinsurers (CP73).  CP73 contains a number of changes which the Central Bank proposes to introduce in order to strengthen its supervisory framework, including:

  • the imposition of requirements on a statutory basis for non-life insurers and reinsurers including a requirement to submit a Statement of Actuarial Opinion (SAO) to the Central Bank and requirements in respect of the SAO regime and the governance of reserving.  An SAO is intended to give an independent view of the adequacy of an insurance company's reserves;
  • the prescription of the signing actuary role as a Pre-Approval Control Function (PCF); and
  • other proposals in relation to Internal Audit Requirement, Risk Margin Report, Peer Review and Pricing Policy.

Comments on CP73 are invited from interested parties before 10 December 2013.

Please click here to view CP73 in full.

Guidance on the Annual PCF Confirmation Return

The Central Bank requires all regulated financial service providers (RFSPs) to file an annual PCF confirmation return in respect of each active PCF holder within the RFSP confirming that he / she is compliant with the Fitness and Probity Standards and continues to agree to abide by those Standards. The Central Bank has published guidance and instructions for RFSPs on how to complete and submit their annual PCF confirmation return. The PCF confirmation return must be submitted through the Central Bank's Online Reporting (ONR) System. The Guidance provides direction on logging on to the system and submitting the return.

The Guidance also refers to a 'Know How' guide located in the Fitness and Probity section of the Central Bank's website, which provides further assistance on the Annual PCF Confirmation process.

Please click here to view the Guidance in full.

Guidelines on PCF Resignation Process

The Central Bank has published guidance on the PCF resignation process. The Guidance provides instructions for RFSPs on how to notify the Central Bank of the resignation of an individual who is approved to hold a PCF. Resignation notifications are submitted through the ONR system.

The Guidance sets out the following:

  • RFSPs are required to notify the Central Bank without delay of the resignation of an individual who held a PCF;
  • Details of the resignation will need to be provided including the effective date of the resignation and the reason for the resignation via a drop down menu in the ONR system, eg terms of appointment expired, career change, etc. If either of the options "performance issues" or "other" are selected, further details must be provided;
  • The RFSP must provide a declaration that it has informed the resignee of his / her right to contact the Central Bank concerning the reasons for his / her departure;
  • Depending on the industry sector, certain additional documents must be uploaded; and
  • Credit institutions and insurance / reinsurance undertakings are required to upload a letter of confirmation signed by the resignee, confirming that at the time of resignation there were no outstanding issues between the resignee and the regulated entity or its board of directors.

Please click here to view the Guidance in full.

PCF Information - Guidance/Instructions

The Central Bank has provided guidance for regulated financial service providers on the features of and instructions as to how to access the ONR PCF information page.

Please click here to view the Guidance / Instructions in full.

Issue 6 and Special Edition of the Intermediary Times

The Central Bank has published a sixth edition and a special edition 2 (issue five) of the Intermediary Times. 

Special Edition 2

The special edition examines the authorisation / post-authorisation / revocation processes for the retail intermediary sector following a detailed review by the Central Bank.  It examines elements of those processes and sets out various amendments and enhancements made by the Central Bank.

  1. Authorisations

The Central Bank has introduced a new single application form for all intermediary applications.  This replaces the three separate application forms for authorisation as a retail investment intermediary, insurance intermediary and mortgage intermediary.  Once the application has been received, the Regulatory Transactions Division will issue login details to the firm within five days so that all relevant Individual Questionnaires (IQs) can be submitted in respect of holders of pre-approval control functions (PCFs).

Applicants wishing to change from a sole trader to a limited company or vice versa are required to submit a new application.

  1. Post-Authorisations

Once an authorisation has been granted, a firm must keep the Central Bank informed of any relevant changes relating to its authorisation.

Some of the common issues identified by the Central Bank which lead to discrepancies between the Central Bank's records and the information submitted by regulated entities via the ONR include the following:

  • The use of trading names which have not been previously notified to the Central Bank;
  • Failure to notify the Central Bank of changes to a firm's contact details; and
  • Failure of firms authorised under the Investment Intermediaries Act, 1995 (IIA) to notify the Central Bank in advance and seek approval for certain shareholding charges.
  1. Minimum Competency Code 2011

The ongoing monitoring and compliance with the Minimum Competency Code (MCC) is crucial for the protection of consumers and is one of the post-authorisation key risk indicators in assessing a firm's potential risk to consumers.

The Central Bank has therefore designed a questionnaire for completion by retail intermediaries for the purpose of assisting it in assessing a firm's compliance with the MCC.

The questionnaire seeks information on a number of areas including the following:

  • Overview of retail financial products offered by the firm;
  • Staff profile within the firm;
  • New entrant arrangements; and
  • Prescribed script functions.
  1. Revocations

The Central Bank has updated the application form for revocation of authorisation / registration of investment, insurance / re-insurance and mortgage intermediaries. A number of changes have been made in order to simplify the revocation process for all retail intermediaries.

  1. Planned Developments

Additional changes proposed for 2013 / 2014 to further develop the authorisation / post-authorisation / revocation process include the following:

  • Introduce an acquiring transaction application form;
  • Update the Central Bank website to include guidance on these processes and FAQs; and
  • Introduce service sector standards.

Please click here to view the special edition in full.

Issue 6 of the Intermediary Times

Topics covered in Issue 6 include the following:

  1. Consultation Paper for the Revision of the Handbook of Prudential Requirements for Authorised Advisors and Restricted Intermediaries (CP72).

The Central Bank is seeking views on a number of key proposals, including the reclassification of authorised advisors and restricted intermediaries, minimum regulatory capital requirements, solvency, goodwill and other intangibles and professional indemnity insurance. 

Submissions are invited from all interested parties by Friday 29 November 2013. 

Please click here to view the consultation paper in full.

  1. New Regulatory Regime for Debt Management Firms

Firms engaged in the provision of debt management services are now required to be authorised by the Central Bank. The consultation paper (CP70) issued by the Central Bank in respect of the proposed regulatory regime to apply to debt management firms closed on 23 September 2013. Timelines to finalise the proposed authorisation requirements and standards for debt management firms have been published on the Central Bank's website.

Firms that were providing debt management services prior to 1 August 2013 are required to submit an application for authorisation to the Central Bank by 31 October 2013 in order to continue to provide these services, pending a decision being made by the Central Bank on their application. Applications may be made based on either the draft or finalised requirements.

  1. New Application Form for Authorisation

The Central Bank has finalised its consolidated authorisation application form. This will replace the three separate application forms for authorisation as a retail investment intermediary, insurance intermediary and mortgage intermediary.

  1. Personal Insolvency Practitioners (PIPs)

Intermediaries who intend to act as PIPs under the new Personal Insolvency Practitioners Regime should be mindful of provisions 4.7-4.11 (Information About Regulatory Status) of the Consumer Protection Code 2012 in relation to regulatory disclosure statements, as it is not an activity regulated by the Central Bank.

Please click here to view Issue 6 of the Intermediary Times.

Central Bank Regulations

The Minister for Finance has made an Order, effective from 19 September 2013, implementing the provisions contained in the Central Bank Reform Act 2010. The provisions insert a new Section 32B into the Central Bank Act 1942, which requires the Central Bank to prepare strategic plans. It should be noted that the date of the relevant period referred to in section 32B (2) has been amended to 1 January 2016.

Please click here to view the Order

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.