Ireland: Insurance Regulatory Update - March 2014

Last Updated: 7 April 2014
Article by Elizabeth Bothwell and Jennifer McCarthy
Most Read Contributor in Ireland, December 2017


On 7 March 2014, the Central Bank published a Summary Report in respect of a review of payment protection insurance (PPI) together with a Q&A for Consumers on PPI and information on the review undertaken. Inspections by the Central Bank in 2011 raised concerns that 11 credit institutions had not complied with the Consumer Protection Code (the CPC) during the PPI sales process. The purpose of the review was to identify where the CPC had not been complied with in respect of the sale of PPI (or where the credit institution could not demonstrate such compliance).

An independent third party was engaged to oversee each of the reviews in the 11 credit institutions. The results of the review indicated that 22% of the PPI sales reviewed were not proved to be in compliance with the CPC. This resulted in €67.4 million (including interest of €4.9 million) being identified for refund to approximately 77,000 policyholders who were sold PPI since 1 July 2007.

A link to the summary report is here.


On 19 March 2014, the Central Bank published a consultation paper (CP79) on its Handling of Protected Disclosures following on from the enactment of the Central Bank (Supervision and Enforcement) Act 2013 (the Act). The Act provides for individual "whistleblowers" to report alleged breaches of financial services legislation to the Central Bank. The Act also places a positive obligation on certain persons occupying pre-approval controlled function roles within regulated financial service providers to report on any contraventions of the Act. Such reports are referred to as "protected disclosures" in the Act.

The purpose of CP79 is to seek views in relation to the policies and procedures which the Central Bank intends to put in place regarding the receipt and handling of protected disclosures. CP79 proposes establishing a central "Whistleblower Desk" to deal with protected disclosures which will include a dedicated email and telephone line. The desk will serve as the primary point of contact for whistleblowers wishing to make a disclosure. The Central Bank will record all calls to this line. Protection will be offered to those who make a disclosure. Whilst the Central Bank will accept anonymous disclosures, it encourages any person who makes a report to provide their name and contact details. The Central Bank does not intend to inform whistleblowers of what action, if any, has been taken as a result of their disclosure to protect the rights of all parties involved in line with statutory requirements. The closing date for submissions is 19 June 2014.

A link to the Consultation Paper is here.


On 24 March 2014, Insurance Ireland and the Office of Public Works (OPW) announced the details of their Memorandum of Understanding (MOU) on the exchange of information on flood defence works. The MOU outlines the principles of agreement between these two bodies regarding how information on how flood defence works would be provided and used by the insurance industry from 1 June 2014. Kevin Thompson, CEO of Insurance Europe, stated that the MOU is the start of a process which will help insurers make flood insurance more widely available in areas benefitting from flood defences built to the desired standard of 1:100 years. The sharing of information between the OPW and insurers will allow insurers to take this data into account when assessing flood risk. The announcement of signing the MOU follows on from Insurance Ireland's "surprise and disappointment" in relation to a government proposal to introduce a levy on non-life insurance policies to create a distress fund to help the Irish consumers who cannot buy flood insurance cover. The additional levy on home, motor and other policies would bring total levies on non-life insurance products to 6%.



The Financial Conduct Authority (FCA) has announced its intention to investigate the treatment of long standing customers in closed funds of UK life insurers. The regulator has stressed that its probe is "discovery work" which means it has not found problems yet. However, it is concerned that insurers may have taken advantage of long standing customers (some of whose investments date back to the 1970s) by imposing high charges and inflexible contracts on old products. The FCA estimates that thirty million policies may be involved including personal pensions, endowments and whole-of-life policies. It will also look at information given to customers, service levels and whether the investment is still appropriate to a particular customer's circumstances. This review, which was widely reported in the media on 28 March last, is part of the FCA's 2014 Business Plan, where it states that it will focus much more regulatory attention on the treatment of customers in the area of life insurance generally.

A link to the FCA statement is here.


On 11 March 2014, the UK FCA published the result of its first market study into general insurance "add-on" products.

The FCA announced that it was undertaking a market investigation in July 2013 after previous work highlighted consumer concerns in relation to whether add-ons represented value for money and a general lack of understanding as to what add-on insurance policies covered. The focus of the study was on the state of competition in the market focusing on five distinct add-on markets namely: (1) travel; (2) gadget; (3) Guaranteed Asset Protection (GAP); (4) Home Emergency; and (5) Personal Accident Cover. The FCA analysed a range of information about firms, intermediaries and consumers in these five distinct markets.

The study concluded that there is a lack of competition in these five markets for general insurance add-ons and this can lead to poor customer outcomes. The FCA stated that there is a "clear" case for intervention and proposed a number of remedies including the prevention of the sale of GAP as an add-on at the same time as the sale of the primary product banning pre-ticked boxes for the sale of add-ons and a requirement that firms publish claims ratios. The Association of British Insurers (ABI) has criticised the methodology used by the FCA and disagreed with the FCA's conclusions. The ABI did however welcome the renewed focus on price comparison websites in providing consumers with good information about the add-ons offered.

Interested parties have until 8 April 2014 to submit comments on the FCA's provisional findings and proposed remedies. The FCA aims to publish its consultation on remedies before end of 2014.

A link to the study is here.


On 11 March 2014, the European Parliament adopted the Omnibus II Directive. The text adopted by Parliament was published on 18 March. The European Council must now formally adopt Omnibus II which will enter into force after publication in the Official Journal. When it voted on 11 March 2014, the Parliament adopted the "trilogue text" of Omnibus II, agreed on 13 November 2013 (the features of which were reported in the November 2013 bulletin).

In the January bulletin, we also reported on the Central Bank's publication of "key dates" for the implementation of Solvency II. The decision of Parliament on Omnibus II demonstrates the Solvency II implementation date of 1 January 2016 is on track. The next step is the Commission's adoption of the Delegated Acts, which will set a large number of the detailed implementing rules for Solvency II, scheduled for summer 2014.

A link to the Commission's press release is here.


Insurance Europe has issued a press release in response to the Parliament's approval of the Omnibus II Directive. Insurance Europe welcomed the adoption of Omnibus II as an important step towards implementing Solvency II. However, it raised concerns with the current draft Commission Delegated Acts. Insurance Europe believes the (as yet unpublished) Delegated Acts that are currently being drafted are inconsistent with the intention of the law-makers of Solvency II. In the press release, Insurance Europe highlighted eight priority areas of concern with the current draft of the Delegated Acts, including (1) the method for setting the level of the credit risk adjustment; (2) the manner in which the volatility adjustment is applied to portfolios; and (3) the level of the risk charges for long term investments. However, Insurance Europe emphasised that workable solutions exist without delaying the implementation date for Solvency II.

A link to the relevant press release is here.


On 12 March 2014, the EBA, ESMA and EIOPA published a joint consultation paper in respect of the draft Guidelines on the convergence of supervisory practices relating to the consistency of supervisory coordination arrangements for financial conglomerates. The guidelines are addressed to competent authorities as defined by the Financial Conglomerates Directive. Financial conglomerates are subject to additional supervision to that of banking or insurance groups in order to address two main concerns, firstly double gearing of capital and secondly, to allow for better monitoring of complex group risks. The purpose of the draft Guidelines is to ensure a greater level of consistency and cooperation on a cross-border and crosssectoral basis between the competent authorities throughout the EU for such financial conglomerates. The public consultation will run until 12 June 2014. The draft Guidelines cover the activities where close co-operation is needed in order to achieve the objectives of supplementary supervision.

The draft Guidelines cover the following areas: (1) mapping the conglomerate structure and written agreements; (2) coordination of information exchange in going concern and emergency situations; (3) supervisory assessment of financial conglomerates; (4) supervisory planning and coordination of supervisory activities in going concern and emergency situations; and (5) other decision making processes among the competent authorities.

A link to the Consultation Paper is here.


During March, EIOPA updated its Questions and Answers template on the Guidelines for preparation for Solvency II. Again, a number of answers have been provided to questions raised in relation to the Submission of Information to National Competent Authorities, particularly addressing confusion around the information to be provided in certain cells of the template documents. In addition, a new set of Questions and Answers has been published on the Forward Looking Assessment of Own Risks (FLAOR). The two questions raised so far focus on national guideline commentary and FLAOR reporting.

A link to the Questions and Answers is here.


In late November, EIOPA published Guidelines on Complaints Handling by Insurance Intermediaries, attaching a report on Best Practice in the area. The Guidelines were addressed to the national authorities responsible for supervising complaints handling by insurance intermediaries. This new Guide is intended as an illustrative guide only for insurance intermediaries to understand what the Guidelines mean for them.

The particular focus of the Guide is to ensure a proportionate approach is taken towards compliance by smaller insurance intermediaries, and in particular sole traders. The Guide sets out EIOPA's view on a number of elements of the Guidelines including what a complaint management policy is and how a complaints management function should be implemented.

The Guide also explains EIOPA's view of how intermediaries should register complaints and how intermediaries should report to national competent authorities/national ombudsmen on complaints. The Guide also explains EIOPA's expectation regarding the information that should be provided to complainants and the nature and provision of that information and also, how intermediaries should follow up on internal complaints from a process perspective.


In the February bulletin, it was noted that the Law Commissions were carrying out a limited public consultation on the initial draft clauses for the proposed Insurance Contracts Bill. This four week public consultation ended on 21 February 2014. On foot of this, the Law Commissions carried out an additional limited consultation on further draft clauses: (1) warranties; (2) insurers' remedies for fraudulent claims by members of group insurance schemes; and (3) contracting out. This second consultation closed on 21 March 2014.

The draft warranties clause has the effect of abolishing 'basis of contract' clauses in non-consumer contracts meaning that it will no longer be possible to convert all representations by a proposed insured during the placement process into warranties and in order to be effective parties must agree warranties in relation to particular matters. Furthermore, it is proposed that the existing rule that breach of warranty discharges an insurer's liability will be abolished and a new remedy suspending liability for breach of warranty is proposed for both express and implied warranties. The draft clauses on group insurance schemes provide that where a fraudulent claim is made by a group member there are only consequences for that group member rather than the group as a whole. The draft contracting out clauses propose that the default provisions embodied in the draft Bill will be mandatory for consumer contracts. In the case of non-consumer contracts it is proposed that non-consumers can contract out of the reforms and substitute their agreed terms, subject to the insurer complying with the transparency requirements proposed in the draft clauses. In addition, there are two exceptions which will continue to be mandatory for non-consumer contracts and which cannot be contracted out of namely, the rule prohibiting basis of contract clauses and any provision whereby an insurer attempts to contract out of liability for a deliberate or reckless breach of the implied term to pay insurance monies within a reasonable time period. A draft bill is expected by Summer 2014.

A link to the consultation is here.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions