Ireland: Insurance Regulatory Update, June 2016

Last Updated: 11 July 2016
Article by Elizabeth Bothwell and Jennifer McCarthy
Most Read Contributor in Ireland, December 2017



On 23 June, the United Kingdom voted to leave the European Union by 51.9% to 48.1%. The vote in favour of Brexit does not automatically trigger an exit by the UK from the EU. Instead, it has commenced a long and complex exit process and it will be some time before it becomes clear what form Brexit will take and when it will occur. However, Brexit does not create a legal vacuum and until the UK formally leaves the EU, EU law will continue to apply to and within the UK. The first step for withdrawal will be for David Cameron or his successor to serve notice on the European Council of the UK's decision to withdraw from the EU under Article 50 of the Treaty of the European Union. It is not yet clear when this will happen but it will trigger the start of a two year negotiation period. When the UK and EU agree the formal Brexit, that agreement will need the support of a qualified majority of EU Member States in the European Counsel and the consent of the European Parliament. As is clear from the large volume of publications on the subject in the last number of weeks, there are five possible Brexit models which have been the focus of discussion: the Norwegian model; Swiss model; Turkish model; Canadian model or World Trade Organisation (WTO) model. It is also possible that the UK and EU will negotiate a bespoke Brexit model, similar, but not identical to, any of the above. If agreement is not reached in the two year period, and the time period for negotiation is not extended, the WTO model will apply by default.

Notwithstanding that the long term consequences are uncertain, the immediate consequence of the Leave vote has been evidenced in market disruption and significant depression of Sterling which has had a knock-on effect on many (re)insurers' investments, capital positions and liquidity. Continued market volatility will challenge (re)insurers across Europe in these ways. For UK based insurers, this challenge is likely to be compounded by a withdrawal of investment capacity, which insurers may struggle with, when attempting to respond to volatile market conditions as foreign investment is likely to reduce pending clarity of the position of the UK outside of the EU.

The exact impact of Brexit on the insurance industry is very much dependent on the nature of the agreement reached on Brexit. However, key concerns for the insurance industry in this context are: (i) the nature of future legal and regulatory changes in the UK effecting how EEA insurers write risks in the UK and, to a lesser extent, access reinsurance capacity from the UK markets; (ii) how existing UK insurers and intermediaries will access the EEA markets - whether that will be achieved by the agreed Brexit model or whether those entities will have to relocate elsewhere in the EU by setting up as a third country branch or a subsidiary in the EU to write EEA risks. The legal, regulatory and practical steps involved and implications of such a relocation would need to be carefully assessed; (iii) the consequences of Brexit for insurance groups headquartered outside the EU that currently have an EU group headquartered in the UK or access the EEA exclusively or to a significant extent through a UK underwriting platform; (iv) the many other ancillary issues which arise for insurers such as the effect of Brexit on data protection, current M&A deals, distribution networks, key outsourcing arrangements and product design.


On 27 June, Insurance Ireland called for a Brexit Stakeholder Consultative Forum on Finance and Insurance, highlighting the importance to the insurance sector of the strong trading relationship between Ireland and the United Kingdom. The aim of this forum is to inform the Government's approach to the UK's recent decision to exit the European Union. It is deemed vital that a productive position on Finance and Insurance is reached through this forum in order to ensure that our national interests in this sector are protected.

A link to the article can be found here.


On 3 June, the Central Bank of Ireland (Central Bank) published a consultation paper entitled "External Audit of Solvency II Regulatory Returns / Public Disclosures". The Central Bank proposes to impose a requirement on all Solvency II firms to have elements of their regulatory returns/public disclosures under Solvency II subject to external audit. This will apply to financial years ending on or after 31 December 2016. The external audit will cover elements of the quantitative information submitted by Solvency II firms and include a reasonable assurance opinion on the elements of the Solvency and Financial Condition Report relevant to the balance sheet, own funds and capital requirements. The paper sets out the process for submitting comments on the proposal, the background to the proposal and a detailed analysis of the proposal, together with its costs and benefits. The Central Bank intends to finalise the policy position by the end of September 2016, to facilitate (re)insurers in planning their audit work associated with 31 December year end. Therefore, comments from stakeholders are invited in an abridged 8 week period, between 1 June to 29 July 2016.

A link to the paper is here.


On 13 June, the Central Bank published an update to its guidance note on the completion of an application form for authorization or registration as a retail intermediary. The guidance has been updated to clarify the stages of the application process around the notification of the assessment and the circumstances that apply when the assessment is not initially favourable. The guidance sets out: the criteria for assessing applications; the documentation required in making an application; a detailed section-by-section walk-through of the form; the processing procedure, including timeframe for assessments; and the responsibility of firms post authorisation. Guidance on the context of the Business Plan and Programme of Operations is also provided in Appendix I.

A link to the guidance paper is here.



On 2 June, EIOPA published its Preparatory Guidelines on Product Oversight and Governance arrangements (POG) for manufacturers and distributors of insurance products. The Guidelines provide support to National Competent Authorities (NCAs) and others in preparation for the application of POG requirements under the Insurance Distribution Directive, which must be implemented by all EU Member States by 23 February 2018. The European Markets Supervisory Authority and the European Banking Authority have already issued guidance on product oversight and governance arrangements. These Guidelines sit side by side with those, so as to ensure a level playing field in financial markets and prevent regulatory arbitrage. The Guidelines are non-binding but they aim to create a common, uniform and consistent application of EU law across all Member States. Within 2 months, NCAs must communicate to EIOPA whether or not they intend to comply with these Guidelines.

A link to the Guidelines can be found here.


On 7 June, Insurance Europe published a position paper on the European Commission's proposal to introduce country-by-country reporting of tax disclosures by certain multi-national undertakings and branches. Insurance Europe indicates that it supports the proposed amendment to the Administrative Cooperative Directive (2011/16/EU) to allow for reports to be exchanged automatically between tax authorities. However, concerns are raised in relation to the proposed amendment to the Accountancy Directive (2013/34/ EU) which seeks to make the publication of country-by-country reports obligatory. Concerns are raised as to the efficacy of the proposal to combat aggressive tax planning, harmful tax regimes and fraud. Issues are also highlighted surrounding specific provisions of the Commission's proposal including: unsuitable additional disclosure requirements; materiality thresholds; protecting commercially sensitive information; and the need for flexibility to ensure that companies do not have to create completely new reporting structures from scratch. Insurance Europe suggests that working towards harmonization of tax regimes and offering clear guidance as to the implementation of international standards may be a better way to ensure the competitiveness of the European Market.

A link to the position paper is here.


On 6 June, the Monetary Authority of Singapore (MAS) published a consultation paper on its Financial Technology (Fintech) Regulatory Sandbox Guidelines. The "regulatory sandbox" is a programme in which participants are encouraged to experiment with Fintech solutions in an environment where the risk to consumers and financial stability is limited. Acceptance to the programme will be based on: how innovative the product is for participants; whether the business has the ability to launch extensively in Singapore after exiting the programme; and whether the innovation would deliver benefits to consumers. Standards for customers' data protection and anti-money laundering provisions will continue to apply to participants but those for credit rating, financial soundness, liquidity and management experience will be dropped. The announcement from MAS comes a month after the Financial Conduct Authority announced a similar project in the UK.

A link to the consultation paper is here.


On 15 June, EIOPA and the China Insurance Regulatory Commission (CIRC) entered into a Memorandum of Understanding which establishes a basis for cooperation between the two organisations. The Memorandum records that EIOPA and CIRC have agreed to focus on three key areas: creating a framework for the exchange of supervisory information; the exchange of updates on relevant developments; and increasing mutual understanding of the respective supervisory regimes for insurance. In a joint press release, EIOPA and CIRC noted the importance of the Memorandum to ensure good communication and cooperation in the interests of protecting consumers and promoting effective supervision.

A link to the Memorandum of Understanding is here.

A link to the press release is here.


As reported in last month's edition of the Arthur Cox Insurance Regulatory Update, EIOPA has launched an EU wide insurance stress test for 2016 which aims to obtain a clear assessment of the vulnerabilities of the European insurance sector. Tobias Buecheler, head of regulatory strategy at Allianz, has concerns regarding the scenarios used in the stress test, stating that they will not produce a meaningful result. One scenario in the test involves a prolonged period of low rates and assumes that the ultimate forward rate (an interest rate which measures the value of long-term liabilities) will fall from 4.2% to 2%. He describes this severe of a drop as extremely unlikely and a "freak stress situation". EIOPA has defended the tests, describing the scenario as having a low probability but stating that the possibility of such a situation arising could not be ruled out. Mr Buecheler is worried the results of the test would lead the European Systemic Risk Board to require insurers to hold additional capital.


The UK's Insurance Act 2015 (the Act) comes into effect on 12 August 2016. All new (re)insurance contracts or variations to (re)insurance contracts made after this date will be governed by the Act.

The Act sets out specific rules for consumer and non-consumer insurance contracts. The Act creates a higher standard for the duty of disclosure in non-consumer contracts than existed before through the new "duty of fair presentation". The Act aims to encourage a greater level of engagement between insureds and insurers in the disclosure process and includes a range of remedies for breaches of pre-contractual disclosure.

The Act has banned "basis of contract" clauses from non-consumer contracts. Previously, these clauses could convert all representations made in the course of a non-consumer insurance contract into contractual warranties. The Act allows for the suspension of insurance cover for the duration of the breach of warranty only.

In both consumer and non-consumer contracts, the remedies for fraudulent claims by policyholders under the Act are that: the insurer is not liable to pay the claim; the insurer may recover any sum paid out on the claim; and the insurer may treat the contract as having been terminated with effect from the time of the fraudulent act.

For consumer contracts, an insurer cannot agree terms which put the insured in a worse position than allowed for under the Act. For non-consumer contracts, other than the ban on "basis of contract" clauses, less favourable terms can be agreed but only if sufficient steps are taken to draw the disadvantageous terms to the insured's attention before the contract is entered into.

A link to the Act is here.


On 8 June, the European Commission published an Inception Impact Assessment which sets out the various options to deal with the potential implications of the decision of the Court of Justice of the European Union in Vnuk v Zavarovalnica Triglav (Case C-162/13) on the Motor Insurance Directive 2009/103/EC (the Directive).

Prior to the Vnuk judgment, the scope of the Directive had been interpreted differently in different countries. In several countries, including Ireland, the Directive was interpreted as only requiring third party motor insurance cover for vehicles "in traffic". As such, accidents that did not take place "in traffic" were not covered by the Directive, e.g. accidents related to agriculture or motor sports. Other countries interpreted the Directive more broadly as applying to all vehicles "in use" rather than "in traffic", which was endorsed by the Vnuk decision.

As a result, by October 2016, all Member States must ensure that the victims of vehicle accidents, regardless of whether the accident happens in traffic, are covered by third party motor insurance. The practical effect in Ireland would be that the Motor Insurers Bureau of Ireland (MIBI) would be obliged to pay compensation to a much wider category of claims. As the MIBI is funded through a levy on insurance premiums, this change could cause an increase in the cost of motor insurance premiums.

The Inception Impact Assessment triggers a process for assessing the impact of the different options available for addressing the consequences of the Vnuk judgement. The document sets out a description of the issues raised by the Vnuk decision, explains why Commission action is needed, covers issues related to subsidiarity and sets out the policy objectives and options available as well as the likely impacts of each option. It states that the likely type of initiative to be taken will be a proposal for a new directive to amend the Directive to allow Member States to decide at a national level whether or not victims of traffic accidents should be pooled together with victims of activities unrelated to traffic through guarantee funds such as the MIBI.

A link to the Inception Impact Assessment is here.


In June, EIOPA updated its Q&A Tool on regulation providing responses to questions raised on EIOPA's Guidelines on: reporting and public disclosure (1 new question); its final report on the ITS templates for the submission of information to the supervisory authorities (1 new question); and its final report on the ITS on procedures, formats and templates of the Solvency and Financial Condition report (1 new question).

Links to the relevant documents are here, here and 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