Ireland: Insurance Regulatory Update - November 2014

Last Updated: 15 December 2014
Article by Elizabeth Bothwell and Jennifer McCarthy

NOVEMBER 2014 – THIS MONTH'S NEWS

  • CENTRAL BANK PUBLISHES FITNESS AND PROBITY STANDARDS 2014
  • CENTRAL BANK PUBLISHES UPDATED REQUIREMENTS FOR REINSURANCE UNDERTAKINGS
  • CENTRAL BANK PUBLISHES CONSULTATION PAPER ON THE USE OF NATIONAL SPECIFIC TEMPLATES FOR SOLVENCY II
  • DEPARTMENT OF FINANCE BEGINS PUBLIC CONSULTATION ON SOLVENCY II
  • CENTRAL BANK PUBLISHES SOLVENCY II PHASING-IN APPROVALS SURVEY
  • CENTRAL BANK PUBLISHES SKILLED PERSONS' REPORTING – STATEMENT OF PROPOSED USE
  • CENTRAL BANK PUBLISHES INDUSTRY LETTER REGARDING PROTECTED DISCLOSURES
  • INSURANCE EUROPE ISSUES PRESS RELEASE ON THE INSURANCE BLOCK EXEMPTION REGULATION
  • EIOPA'S 4th ANNUAL CONFERENCE HELD IN FRANKFURT, GERMANY
  • SOLVENCY II
  • IMD2 - COUNCIL OF THE EUROPEAN UNION AGREES A GENERAL APPROACH ON IMD2
  • KEY INFORMATION DOCUMENTS FOR PRIIPS

IN DOMESTIC NEWS...

Central Bank Publishes Fitness And Probity Standards 2014

On 3 November, the Fitness and Probity Standards 2014 (the 2014 Standards) were published. The 2014 Standards supplement/amend the Fitness and Probity Standards 2011 (the 2011 Standards). The Central Bank has also introduced revised Guidance on Fitness and Probity Standards and a new Fitness and Probity FAQ document which provide some additional information.

The 2011 Standards have been amended in two ways. Firstly, the 2011 Standards have been amended in recognition of the change introduced by the European Single Supervisory Mechanism. The European Single Supervisory Mechanism was implemented at a European level in order to ensure the safety and soundness of the European banking system and requires the regulated financial service provider to notify the European Central Bank of the appointment of a person performing a pre-approval controlled function (PCF) to the management board of "significant credit institutions". Secondly, the 2014 Standards reflect the clarified position in relation to certified persons under the Investment Intermediaries Act, 1995 in the context of the outsourcing exemption that can apply when PCFs or controlled functions are outsourced to a regulated financial service provider.

A link to the Fitness and Probity Standards 2014 is here.

A link to the Guidance on Fitness and Probity Standards is here.

A link to the Fitness and Probity Standards FAQ document is here.

Central Bank Publishes Updated Requirements For Reinsurance Undertakings

In November, the Central Bank published updated versions of the (1) Requirements for Non-Life Reinsurance Undertakings (2) Requirements for Life Reinsurance Undertakings and (3) Requirements for Composite Reinsurance Undertakings (the Requirements). The updates replace the previous requirements which were published in 2012. The Requirements note the changes to the minimum guarantee fund for all reinsurers (except captives) effective from 31 December 2014. The Requirements set out further detail regarding the submission of annual forms, in particular on ceding commission and other operating expenses on the P&L form. The Central Bank also highlights its view that providing loans for activities not directly related to the reinsurance business of a reinsurer is not consistent with a firm's authorisation. Also, it is noted that the format of the compliance statement is now housed in the 'Guideline for Life Insurance Undertakings, Non-Life Insurance Undertakings and Reinsurance Undertakings - Compliance Statements'.

A Link to the Requirements is here.

Central Bank Publishes Consultation Paper On The Use Of National Specific Templates For Solvency II

On 6 November, the Central Bank published a Consultation Paper on the use of National Specific Templates (NSTs) for insurers and reinsurers under Solvency II. In the Consultation Paper, the Central Bank notes that it considers it necessary to issue NSTs arising first from the specific nature of certain insurance undertakings supervised in Ireland (eg certain hub and spoke operations) and secondly, particular products in which Central Bank-supervised insurers dominate (eg variable annuity business). The proposed NSTs include the provision of information on income statements for life and non-life firms and technical provisions and insurance claims information for non-life firms. It is proposed that the NSTs will apply to insurers categorised as High and Medium High impact under PRISM, to groups of which the Central Bank will be the group supervisor under Solvency II and to undertakings which transact variable annuity business and will, for the most part, be submitted to the Central Bank on a quarterly and annual basis via the Online Reporting System. The Central Bank is inviting industry stakeholders to make their submissions on the Consultation Paper by 9 January 2015.

A link to the Consultation Paper is here.

Department Of Finance Begins Public Consultation On Solvency II

On 20 November, the Department of Finance (the Department) issued a Consultation Paper (the Paper) on Solvency II. The purpose of the Paper is to encourage submissions to the Department on the transposition of Directive 2009/138/EC (Solvency II). The consultation will inform the Department's policy position on the legislative provisions of Solvency II, in relation to four provisions where the Department has discretion as to whether or not to apply them in national legislation. The Paper invites submissions on the following: (1) the option in Solvency II which would require that the use of a Volatility Adjustment by firms be subject to supervisory approval; (2) the implementation of an obligation requiring branch insurance undertakings writing life assurance with a head office outside the community to submit systemic notification of technical bases used for calculating scales of premiums and technical provisions; (3) the option to have a cooling off period for policy holders who have purchased individual life insurance; and (4) aspects of the calculation of the group solvency calculation of group undertakings and where the Central Bank is group supervisor. The consultation also affords stakeholders an opportunity to raise any other issues which need to be addressed in connection with the transposition of Solvency II.

The consultation will close on 21 December 2014.

A link to the Paper is here.

Central Bank Publishes Solvency II Phasing-in Approvals Survey

On 10 November, the Central Bank issued a survey to compliance officers of (re)insurance undertakings. The survey, which is being conducted on key Solvency II phasing-in approvals for (re)insurance undertakings (excluding groups and internal model related approvals), is being undertaken by the Central Bank to assist in resource planning and process design. Under Solvency II, the Central Bank will have the power to consider applications submitted by (re) insurance undertakings for approvals or permission regarding phasing-in approvals from 1 April 2015. The survey will close on 12 December 2014.

Central Bank Publishes Skilled Persons' Reporting – Statement Of Proposed Use

Under Part 2 of the Central Bank (Supervision and Enforcement) Act 2013, the Central Bank, in exercising its supervisory role over regulated financial service providers, may oblige a regulated financial service provider (or a related undertaking) (together, the Reviewee) to provide a report (a Skilled Persons' Report) (the SPR) on matters specified by the Central Bank. The Central Bank may only exercise its power to commission a SPR after having considered if any other powers available to it are more appropriate in the circumstances. To provide further guidance on these obligations, on 19 November the Central Bank published the 'Skilled Persons' Reporting – Statement of Proposed Use'.

The SPR will be used by the Central Bank for the following purposes: (1) as a diagnostic tool to identify and measure risks; (2) as a preventative action to limit or reduce identified risks; and (3) as a remedial action to allow the Central Bank to respond, as appropriate.

If the Central Bank is of the opinion that an SPR is required, the Central Bank will issue a notice (the Notice) obliging the Reviewee to provide the SPR to the Central Bank, at the Reviewee's expense. The Central Bank will consider if it would be more appropriate for the Reviewee to undertake the work themselves and report directly to the Central Bank. The Notice will set out the scope, timeframe and form of the SPR. The skilled person preparing the SPR should be a lawyer, accountant, auditor or another person with the appropriate knowledge of the Reviewee's business. The skilled person has specific obligations in relation to communicating and reporting to each of the Central Bank and the Reviewee. The Central Bank may, at its own discretion, engage in tri-lateral discussions with the Reviewee and the skilled person.

A link to the 'Skilled Persons' Reporting – Statement of Proposed Use' is here.

Central Bank Publishes Industry Letter Regarding Protected Disclosures

On 5 November, the Central Bank published an industry letter (the Letter) outlining relevant provisions of the Central Bank (Supervision and Enforcement) Act 2013 (the 2013 Act) which are of particular importance to regulated firms and those in PCFs. The Letter sets out Section 38 of the 2013 Act which relates to the definition of a "protected disclosure" and notes that the 2013 Act provides certain protections for employees who make a protected disclosure. However, in the Letter, the Central Bank emphasises that it does not have a role in administering those protections or in determining whether a disclosure is a protected disclosure for the purposes of the 2013 Act. The Letter also highlights the obligation placed on PCFs to disclose to the Central Bank information which is material to a protected disclosure and requests that each PCF be made aware of their obligations.

Finally, the Letter refers to the recently enacted Protected Disclosures Act 2014 (the 2014 Act), which came into effect in July of this year. The Central Bank is a prescribed body under that legislation and as such must treat protected disclosures by workers in accordance with the 2014 Act.

A link to the Letter is here.

IN EUROPEAN AND INTERNATIONAL NEWS...

Insurance Europe Issues Press Release On The Insurance Block Exemption Regulation

On 4 November, Insurance Europe issued a press release on the Insurance Block Exemption Regulation (IBER). The IBER provides an exemption to certain insurance-specific agreements which would otherwise be caught by European competition laws which prohibit anti-competitive arrangements. The exemption covers two types of agreements between insurance and reinsurance companies: (1) agreements with respect to joint compilations, joint tables and studies; and (2) common coverage of certain types of risks (coinsurance or co-insurance pools). The comment by Insurance Europe coincides with the closure of the European Commission's consultation on the IBER.

Insurance Europe states that the IBER has a fundamental impact on the insurance industry, and ultimately consumers, by enhancing competition and increasing the choice of insurance products available to consumers. Further, it commented that greater technological advances and increased incidences of fraud necessitate greater co-operation and data exchange between insurers. Insurance European called for the IBER to be fully renewed by the European Commission in 2017.

A link to the press release is here.

EIOPA's 4th Annual Conference Held In Frankfurt, Germany

On 19 November, the Chairman of EIOPA, Mr. Gabriel Bernardino, delivered a speech on 'EIOPA Strategic Priorities Going Forward' at the 4th Annual EIOPA Conference in Frankfurt, Germany.

Mr. Bernardino set out EIOPA's strategic priorities going forward as being: (i) ensuring consistency across member states in the implementation and supervision of the Solvency II regime; (ii) incentivising the creation of complementary private pension schemes to supplement public payas- you-go pension systems; and (iii) enhancing consumer protection through risk-based regulation and supervision of the conduct of businesses.

Mr. Bernardino also set out three fundamental objectives which EIOPA will implement to build a robust EU regulatory framework to assist in reforming the current pensions system.

Mr. Bernardino also reiterated EIOPA's commitment to the protection of policyholders and outlined a number of initiatives which EIOPA is currently working on to enhance policyholders' protection. However, Mr. Bernardino stressed that in order to ensure policyholders' protection, national regulators should be provided with the appropriate enforcement powers and resources to ensure the effective supervision of the conduct of businesses.

UPDATES...

Solvency II

On 27 November, the Council of the European Union issued a press release stating that the Council decided not to object to the adoption by the European Commission of a Delegated Act which contains the detailed implementing rules for Solvency II. As discussed in last month's Insurance Regulatory Update the European Commission has adopted the Delegated Act by Regulation. Unless the Parliament objects to the Delegated Act, it can now be published and enter into force.

A link to the press release is here.

IMD2 - Council Of The European Union Agrees A General Approach On IMD2

On 5 November, the Council of the European Union published its general position on the proposed insurance mediation directive now known as the Insurance Distribution Directive (IMD2). IMD2 will amend the first Insurance Mediation Directive (Directive 2002/92/EC) (IMD1). This is an important milestone as it allows for negotiations between the Council and the European Parliament to begin with the stated aim of adopting the directive at first reading. IMD2 is designed to improve EU-wide regulation of the retail insurance market in a way that facilitates market integration, promote fair competition between distributors of insurance products, and enhance the protection of policyholders.

Once the directive has been adopted, Member States will have two years to transpose IMD2 into national laws and regulations. Member States will not be prevented from applying more stringent provisions than the requirements set out in the directive to protect consumers provided any such provisions are consistent with EU law.

A link to the press release is here.

KEY INFORMATION DOCUMENTS FOR PRIIPs

On 10 November, the Council of the European Union adopted the Regulation on Key Information Documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs) (the PRIIPs Regulation). The requirements set out in the PRIIPs Regulation will be applicable two years after the PRIIPs Regulation comes into force.

On 17 November, the Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA) (the ESAs) published a joint discussion paper on the use of KIDs for PRIIPs. Under the PRIIPs Regulation, the ESAs are tasked with developing regulatory technical standards (RTS) on the content and presentation of KIDs for PRIIPs. The Joint Committee published the discussion paper to seek views from stakeholders in relation to the drafting of RTS and how standardised KIDs should be developed. Comments on the discussion paper are to be submitted by 17 February 2015.

On 27 November EIOPA issued a consultation paper on 'Product Intervention Powers under the Regulation on KIDs for PRIIPs'. Under the PRIIPs Regulation, EIOPA has certain intervention powers whereby the marketing, distribution and sale of insurance-based investment products giving rise to, among other issues, serious concerns regarding investor protection, can be temporarily prohibited or restricted. EIOPA is preparing its technical advice regarding its intervention powers with the aid of the consultation paper, as requested by the European Commission. Comments on the consultation paper are to be submitted by 27 February 2015.

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 Mondaq.com.

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

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 by clicking here .

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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