Ireland: Insurance Regulatory Update - October 2014

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

In Domestic News...


On 9 October, the Central Bank published the latest edition of its newsletter 'Solvency II Matters'. The Newsletter covers Solvency II developments at a European and domestic level since May 2014, many of which have been reported in previous editions of the Insurance Regulatory Update.

The Central Bank noted that at the time of writing, the Level 2 Delegated Act for Solvency II had not been published, despite the fact that they were due to be in finalised in September (note: see Article on the Delegated Act below). EIOPA is proceeding with its consultations on Level 2 technical standards and Level 3 guidelines as they planned.

On the domestic front, the Central Bank reminds undertakings to submit a FLAOR report before 31 December and cautions that the report must be submitted using the Central Bank's ONR System. The Central Bank also gives an update on the submission dates for the annual and quarterly reporting obligations for solo and group undertakings under the Submission of Information Guidelines.

In other news, the Central Bank will consult on the national specific templates for regulatory reporting under Solvency II in November and will also carry out a survey to determine undertakings' intention to apply for early approvals from April as contemplated in Omnibus II (e.g. on matters such as the use of volatility or matching adjustments for long-term guarantees etc.).

A link to the Newsletter is here.


Insurance Ireland has recently issued 'A Universal Pension for Ireland—policy and implementation issues based on international best practice' (the Report) in response to the Irish Government-commissioned OECD review of the Irish Pension System. The review recommended the establishment of a universal defined contribution pension model to cover all workers in both the public and private sectors.

The Report looks at the role that the insurance industry can play in establishing and maintaining the proposed pension model in a manner consistent with best practice. Insurance Ireland highlights that the industry can bring a great deal of knowledge and experience to discussions by explaining what implementing issues may arise on the policy options under consideration. Also, Insurance Ireland emphasises that its members have the capacity to implement a universal pension solution at minimum cost to the State. The Report stresses the need for a consensus of opinion on the best way forward and that the new system should be guided by fairness, practicality and affordability.

A link to the Insurance Ireland press release is here.

A link to the Report is here.

In European And International News...


On 10 October, the European Commission adopted a draft Delegated Act which contains the detailed implementing rules for Solvency II. The European Commission has adopted the Delegated Act by Regulation. Both the European Parliament and Council must scrutinise and approve the Delegated Act before it will have the force of law, for which they have a maximum period of 6 months.

The Delegated Act sets out implementing rules (based on 76 specific delegations of power to the Commission set out in Solvency II) and provides detailed requirements for insurance undertakings and groups. It runs to 312 pages and puts detail around the principles set out in the Solvency II Framework Directive. There is a helpful explanatory memorandum provided on page 2 of the Delegated Act. In terms of format, the Delegated Act is divided into 3 titles. Title I contains rules on: Pillar 1 (valuation and risk-based capital requirements); Pillar 2 (enhanced governance); and Pillar 3 (increased transparency). Title I is further sub-divided into 15 chapters that cover implementing rules on every aspect of Solvency II including valuation of assets and liabilities including 'long-term guarantee measures', own funds, solvency capital requirement, investment in securitisation positions, governance, reporting and disclosure etc. Title II sets out all implementing rules for insurance groups and Title III covers rules on third country equivalence and some final provisions.

The Commission also published a 'Frequently Asked Questions' document, which helpfully explains the purpose of the Delegated Act and provides guidance on 13 issues concerning the Delegated Act. For example, the FAQ addresses how the Delegated Act operates to stimulate long-term investment, how Solvency II will be applied in a proportionate manner to smaller and less complex insurers and how the Delegated Act addresses high quality securitisation.

A link to the Delegated Act is here.

A link to the FAQ is here.


On 29 September, EIOPA published its Multi-Annual Work Programme 2015 – 2017 (the Programme).

The Programme sets out the five main strategic goals of EIOPA since it was established in 2011: (i) ensure transparency, simplicity, accessibility and fairness across internal markets for consumers; (ii) lead the development of sound and prudent regulations supporting the EU internal market; (iii) improve the quality, efficiency and consistency of the supervision of EU insurers and occupational pensions; (iv) identify, assess, mitigate and manage risks and threats to the financial stability of the insurance and occupational pension sectors; and (v) act as a modern, competent and professional organisation, with effective governance arrangements, efficient processes and a positive reputation.

Under each strategic goal, EIOPA explains what its objectives are in achieving that goal in the next 3 years. Annex 1 to the Programme is particularly helpful as it sets out the key outputs / deliverables of EIOPA to achieve each objective. A clear work programme is set out regarding EIOPA's role in a large number of legislative projects including: deliverables for the Second Insurance Mediation Directive (IMD2) including design of product disclosure documents, design of product governance structures etc; developing Implementing Technical Standards and Regulatory Technical Standards and Level 3 Guidelines for Solvency II; and proposals for an EU-wide insurance guarantee scheme etc.

The Programme also covers EIOPA's role in the cross-sectoral work of the Joint Committee with the European Banking Authority and the European Securities and Markets Authority. The core areas of focus for the Joint Committee include financial conglomerates, risk and vulnerabilities for financial stability and consumer protection together with anti-money laundering measures.

A link to the Programme is here.


On 1 October, EIOPA published a Consultation Paper on Conflicts of Interest in Direct and Intermediated Sales of Insurance-Based Investment Products.

The Consultation Paper follows the adoption of MiFID II, which amended the Insurance Mediation Directive (Directive 2002/92/EC) (IMD1). MiFID II amended IMD1 by introducing a requirement for insurance undertakings and intermediaries to take all reasonable steps to prevent conflicts of interest from adversely affecting the interest of customers. The European Commission has requested EIOPA to provide technical advice on the possible content of delegated acts which the Commission is empowered to adopt regarding these new conflicts of interest requirements in the amended IMD1. Specifically, the Commission has requested technical advice on: (i) establishing minimum criteria for the identification of conflicts of interest that may be damaging to consumers; (ii) the content of a conflicts of interest policy; (iii) proportionality in the application of the new requirements for small undertakings and sole traders; and (iv) means of identifying remuneration arrangements and inducements which may give rise to conflicts of interest and means of avoiding or disclosing such arrangements.

While EIOPA has not been specifically requested to consider organisational measures for the purposes of insurers producing "investment research" within the meaning of MIFiD II, it does ask stakeholders whether they agree that insurers/intermediaries are principally not involved in the production and dissemination of investment research.

The Consultation Paper sets out EIOPA's draft technical advice and sets out questions to stakeholders. The cut-off date for responding to the Consultation Paper is 1 December 2014.

A link to the Consultation Paper is here.


In last month's edition of the Insurance Regulatory Update, we reported on Insurance Europe's recommendations on the proposed Data Protection Regulation (the Regulation). This month, Insurance Europe reports that the Regulation may have implications for the fight against insurance fraud. In its press release of 22 October, Insurance Europe notes that the right "to be forgotten" and the right to withdraw consent could hinder the efforts of insurance companies to identify those committing insurance fraud, as the company will no longer be able to track the volume and type of claims made by persons in the past. Insurance Europe calls for amendments to be made to the draft Regulation to address this.

A link to the press release is here.


On 23 October, the International Association of Insurance Supervisors issued a press release announcing that it had finalised the development of the Basic Capital Requirements (BCR) for global systemically important insurers or "G-SIIs". The BCR is the first global insurance capital standard and has been endorsed by the Financial Stability Board. In 2015, the BCR will be reported confidentially to the group-wide supervisor and the IAIS will review the efficacy of the BCR during this period. The IAIS also state that the development of the BCR is the first step of a long-term project to develop risk-based group-wide global insurance capital standards.

A link to the press release is here.


On 17 September, the Court of Justice of the European Union gave a ruling in the case of Skandia America Corp (USA), filial Sverige v Skatteverket (C- 7/13). The request for the ruling was brought by Skandia America Corp as a result of the Swedish tax authorities' decision to charge VAT on the supply of services from Skandia America Corp to its Swedish branch, filial Sverige. Traditionally, it had been understood that services supplied by a head office to its branch is not a separate taxable person for VAT purposes.

However, the Court held that where a head office insurer in a third country supplies services to a branch of that company within the EU, and the branch is a member of a VAT group in that EU member state, such supplies are potentially within the scope of VAT as they are being made to the VAT group, rather than the EU branch itself.

Although the Skandia case concerned the intra-group supply of services from a US-based company to its EU branch, the ruling will be of relevance to any insurance group which makes cross-border supplies of services to an EU branch. The Office of the Irish Revenue Commissioners does not appear to have yet commented on the ruling.

On 13 October 2014, the UK HM Revenue and Customs issued a customs brief stating that it will carefully consider the impact of the decision but noted at the outset that UK VAT grouping rules are different to the corresponding Swedish rules.

A link to the judgment is here.

A link to the HM Revenue and Customs brief is here.


The Financial Times has reported on an unusual decision of the Prudential Regulation Authority of the Bank of England (the PRA) to issue a letter to 30 insurers in the UK asking whether insurers have considered the effect of climate change on the viability of their business models and its potential effect on their investment portfolios.

The PRA has taken a proactive approach to the issue of climate risks for insurers, in part due to the double exposure which the insurance industry could face if it was unprepared to meet the challenges brought by extreme climate change i.e. increasing pay-outs to policyholders on catastrophe risks and the impact on investments in assets such as properties and fossil fuels. In the letter, the PRA hinted at possible regulatory requirements by asking insurers to consider the role of insurance regulation in response to climate change.

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.

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