Ireland: Solvency II – The Central Bank Of Ireland's Role Under The Supervisory Review Process

Under the new Solvency II rules in Ireland, the Central Bank of Ireland (the "Central Bank") will be subject to new legal requirements.

The supervisory review process under Solvency II includes the evaluation by the Central Bank of strategies, processes and reporting procedures adopted by (re)insurance undertakings to meet their obligations under Solvency II.

Solvency II - Ireland's Regulatory Framework

The Irish State transposed into Irish law the Solvency II Directive (Directive 2009/138/EC) as amended by the Omnibus II Directive (Directive 2014/51/EC) by way of Statutory Instrument, namely the European Union (Insurance and Reinsurance) Regulations 2015 (the "2015 Regulations") which came into effect on 1 January 2016.

The 2015 Regulations will also be supplemented by more detailed technical Commission Level 2 measures and they in turn will be supplemented by Level 3 guidance for national supervisors developed and adopted by the European Insurance and Occupational Pensions Authority (EIOPA).

The Supervisory Review Process

The Central Bank must, in carrying out the supervisory review process, ensure that it comprises three sub-processes, namely:

(i) the risk assessment framework;

(ii) the detailed review; and

(iii) the supervisory measures.

The Solvency II rules require the Central Bank to discharge its functions under the supervisory review process in a consistent manner. It is a cornerstone of the new regulatory framework that all actions undertaken by the Central Bank as part of the supervisory review process are discharged proportionately throughout all stages of the review process.

To ensure appropriate and effective supervision, the Solvency II rules require the Central Bank to ensure that there is an appropriate level of communication between it and (re)insurance undertakings throughout the entire supervisory review process.

(i) Risk assessment framework

The Central Bank is required under the Solvency II regime to use a risk assessment framework to identify and assess current and future risks that each (re)insurance undertakings encounter or may encounter including the (re)insurance undertaking's capacity to identify, measure, monitor, manage and report on those risks.

In developing the risk assessment framework for each (re)insurance undertakings, the Central Bank should only use this framework for the purposes of conducting effective supervision of (re)insurance undertakings, setting the frequency of the regular supervisory reporting and to determine the scope, depth and frequency of off-site analysis and on-site inspections or other matters needed for the supervision of (re)insurance undertakings.

(ii) Scope of the risk assessment framework

Solvency II requires the Central Bank to apply a risk-based and forward-looking approach to supervision to include an assessment of:

(a) the potential impact of the failure of a particular (re)insurance undertaking would have on its policyholders, beneficiaries and on the market and assign an impact classification to each undertaking;

(b) the information when regular reporting is received by the Central Bank and consider the need (if any) to reconsider the constituent elements of the risk assessment framework;

(c) the potential impact of the failure of an (re)insurance group would have on its policyholders, beneficiaries and on the market and assign an impact classification which would take account of the complexity and inter-connectedness of the (re)insurance group;

(d) the current and future risks that (re)insurance undertakings or insurance groups face or may face such as economic conditions and their potential effect on the solvency and financial position of the undertaking concerned.

The Central Bank should use the outcome of the risk assessment framework together with the risks identified to develop the supervisory plan which will set out the frequency and intensity of the Central Bank's supervisory activities. At all times, the Central Bank throughout the supervisory review process must consider if it is necessary to update the outcome of the risk assessment framework.

(iii) Detailed review

The Central Bank is obliged to carry out detailed review activities based on the supervisory plan and focusing on the areas of risk as identified in the risk assessment framework. The main findings and conclusions of the detailed review should be recorded at all stages by the Central Bank.

If the supervisory plan contains reference to on-site inspections, the Central Bank must carry out regular on-site inspections. Importantly, the Central Bank must have appropriate and adequate governance mechanisms in place which allow it to monitor on-site inspections. Such on-site inspections should follow certain prescribed phases, namely preparation, field work and written conclusions.

The written conclusions of on-site inspections should be communicated by the Central Bank to the (re)insurance undertaking in writing and the undertaking should be afforded all fair procedures and the undertaking concerned should have the right to respond to the Central Bank within a reasonable timeframe.

(iv) Supervisory measures

The Central Bank must, based on the conclusions of the detailed review, identify any weaknesses or actual or potential deficiencies or non-compliance with requirements that could lead it to imposing supervisory measures.

Any supervisory measures adopted by the Central Bank must be appropriate to the level of significance of the weaknesses or actual or potential deficiencies or non-compliance faced by the (re)insurance undertaking.

Importantly, the Central Bank must, at all times, exercise its supervisory powers in a consistent, proportionate and objective manner.

In the event that the Central Bank seeks to impose supervisory measures, it must notify the (re)insurance undertaking concerned in writing and in a timely manner about the specific supervisory measures that the undertaking should implement. This communication should include a timeframe in which the (re)insurance undertaking is to implement the actions necessary to comply with the measures and the Central Bank will monitor whether the measures are appropriately implemented by the (re)insurance undertaking.

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
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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