Consultation on National Specific Templates for Insurers and Reinsurers under Solvency II – CP 89
On 6 November 2014, the Central Bank published a consultation paper on National Specific Templates for Insurers and Reinsurers under Solvency II. The paper sets out the Central Bank's proposals relating to reporting templates which it deems necessary to address requirements specific to the local market and / or the nature of insurance undertakings supervised in Ireland which are not catered for in the set of Solvency II harmonised reporting templates developed by EIOPA.
Submissions are welcomed from interested stakeholders before 9 January 2015.
To view the consultation documents, please click here.
The Central Bank of Ireland has published the latest edition of the Intermediary Times which reports on a number of developments, including the following:
(1) Handbook of Prudential Requirements for Investment Intermediaries
The new Handbook replaces the 2006 Handbook of Prudential Requirements for Authorised Advisors and Restricted Intermediaries.
All retail investment intermediaries are required to comply with the Handbook as a condition of their authorisation. Some of the main changes introduced in the Handbook include the following:
- Multi-agency intermediaries and authorised advisors will now be defined as "investment intermediaries"
- An investment intermediary must at all times be in a position to meet its financial obligations in full as they fall due
- Goodwill and other intangible assets are to be excluded from the calculation of a firm's balance sheet assets for regulatory reporting purposes
- The requirement to hold professional indemnity insurance has been imposed directly on investment intermediaries, mirroring the requirement for insurance intermediaries set out under the Insurance Mediation Regulations, 2005
- An investment intermediary must notify the Central Bank in advance where it proposes to outsource any important operational function
The changes took effect from 1 October 2014 and investment intermediaries and the management thereof are reminded that failure to comply with a requirement imposed under a statutory provision may result in the imposition of an administrative sanction or revocation of a firm's authorisation under the IIA.
(2) Amendment of Professional Indemnity Insurance Levels
Requirement 4.2 of the Handbook requires an investment intermediary to provide cover for €1.25 million per claim and €1.85 million in aggregate per type of regulated activity. Firms are required to hold minimum aggregate cover of €1.85 million in relation to investment and insurance business with effect from 1 October 2014. On renewal over the next 12 months, firms are required to ensure that their PII covers the minimum levels to be ring-fenced; €1.85 million aggregate cover for insurance business and €1.85 million aggregate cover for investment business.
The Central Bank is conducting PII themed inspections of (re)insurance intermediaries that have reported a breach of their PII requirements in their most recently submitted online annual return. The Central Bank reminds firms of their continuing responsibility to ensure that its PII policy satisfies the requirements of Regulation 17 of the IMR.
(3) Information for Auditors
Firms authorised under the Investment Intermediaries Act 1995 (IIA) are asked to remind their auditors to submit various information to the Central Bank including, (i) a Statutory Duty of Confirmation relating to the authorised entity and (ii) copies of reports issued to the management arising from the audit or copies of reports sent to the Office of the Director of Corporate Enforcement.
(4) Incorporated Entities
The Central Bank does not require companies registered as insurance intermediaries under the Insurance Mediation Regulations 2005 and / or authorised under the Consumer Credit Act 1995 to submit audited accounts. Auditors of such companies do not have an obligation to submit a Statutory Duty of Confirmation report to the Central Bank or copies of reports issued to management. Such firms cannot, however, avail of the audit exemptions under Section 32 of the Companies (Amendment) (No.2) Act 1999.
To view the latest edition of the Intermediary Times, please click here.
Changes to Fitness and Probity Regime
The Central Bank has recently published an Amending Regulation (S.I. 394 of 2014). The Regulation introduces a number of changes to the Fitness and Probity Regime. Together with the amending Regulation, the Central Bank also published non-statutory Guidance on the Fitness and Probity Amendments 2014 which aims to assist regulated financial service providers in complying with their obligation under the amending Regulation.
To view the amending Regulation and accompanying Guidance, please click here.
Guidelines on Preparing for Solvency II – Q&A
The Central Bank has recently published a Q&A document in response to questions posed by various stakeholders on the Central Bank's Guidelines on Preparing for Solvency II (the "Guidelines"). The document provides clarity on various sections of the Guidelines including, for example, confirming deadlines within which certain requirements must be met.
To view the Q&A document in full, please click here.
Guidelines on Preparing for Solvency II – Submission of Information
The Central Bank has published an updated version of its Guidelines on Preparing for Solvency II – Submission of Information. The Guidelines have been amended to reflect the Errata document published by EIOPA in February 2014 which amends EIOPA's Guidelines on Submission of Information to National Competent Authorities.
To view the updated Guidelines, please click here.
Central Bank Regulatory Notice on the Adaptation of Solvency I Minimum Guarantee Fund (MGF)
The Central Bank has recently published a regulatory notice on the adaptation of the Solvency I Minimum Guarantee Fund (MGF) for reinsurance undertakings, including captives. The various changes include:
- a revised Minimum Guarantee Fund of €3,600,000 for reinsurance undertakings instead of the current base amounts of €3,400,000; and
- the Minimum Guarantee Fund for captive reinsurance undertakings of €1,200,000 will not change.
The adaptations will come into effect in Ireland for all undertakings on 31 December 2014 and will apply to all annual and quarterly returns for reporting periods ending on or after that date.
To view the Notice in full, please click here.
Fitness and Probity Service Standards Performance Report
The Central Bank has published a Regulatory Transactions Service Standards Performance Report (the "Report") in respect of the six month period from January to June 2014. The purpose of the Report is to set out the Central Bank's performance against Service Standards it has committed to in respect of the processing of Fitness and Probity PCF Individual Questionnaire ("IQ") applications and the authorisation of new entities.
There are a total of seven Service Standards and the Report notes that performance against the targets was exceeded in six of the seven cases during this period.
To view the Report in full, please click here.
Insurance Statistics 2013
The Central Bank has published Insurance Statistics 2013. This sets out a summary of the Life Assurance and Non-Life Insurance returns made to the Central Bank pursuant to the European Communities (Life Assurance) Framework Regulations 1994 and the European communities (Non-Life Insurance Accounts) Regulations 1995 in respect of business written during the year ended 31 December 2013.
Please click here to view the document in full.
Handbook of Prudential Requirements for Investment Intermediaries
The Central Bank has published a Handbook of Prudential Requirements for Investment Intermediaries (the "Handbook"). The requirements set out in the Handbook are imposed under the Investment Intermediaries Act 1995 and apply to investment business firms which come within the meaning of an investment intermediary as set out in Part 7 of the Handbook.
The Handbook is effective from 1 October 2014 and replaces the Handbook of Prudential Requirements for Authorised Advisors and Restricted Intermediaries introduced in July 2006.
Please click here to view the Handbook in full.
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.