EUROPEAN UNION (INSURANCE DISTRIBUTION) REGULATIONS 2018
On 29 June, the Department of Finance published the European Union (Insurance Distribution) Regulations 2018 (the Regulations), which transpose the Insurance Distribution Directive (Directive 2016/97/EU) into Irish law. The Regulations will come into effect on 1 October and represent a significant departure from the way in which the distribution of (re)insurance products are regulated. The Regulations also repeal the European Communities (Insurance Mediation) Regulations 2005 and make a number of insurance related amendments to the Investment Intermediaries Act 1995. The Regulations are accessible here.
CENTRAL BANK CONSULTS ON CHANGES TO THE DOMESTIC ACTUARIAL REGIME AND RELATED GOVERNANCE REQUIREMENTS UNDER SOLVENCY II
On 22 June, the Central Bank published consultation paper CP122 in respect of amendments that it proposes to make to the Domestic Actuarial Regime relating to: (a) the governance of with-profits funds; and (b) the format of the Actuarial Opinion on Technical Provisions (AOTP) as outlined in the Domestic Actuarial Regime.
The Central Bank proposes introducing additional requirements on (re)insurers and on the Head of Actuarial Function (HoAF) in relation to With-Profits business, as follows:
- (Re)insurers will be required to produce a With-Profits Operating Principles (WPOP) document, which will be available to fund members, and to provide With-Profits fund members with an annual report on compliance of the fund with the principles detailed in the WPOP;
- The HoAF will be required to report to the Board and fund members annually on the ongoing compliance of the With-Profits funds with the principles in the WPOP;
- The HoAF will be required to provide an opinion to the Board on the compliance of the Technical Provisions (TPs) with the WPOP in the Actuarial Report on TPs.
It is proposed that the Central Bank will have the discretion to grant exemptions to the With-Profits governance requirements, subject to certain criteria being met including: where the liabilities of the fund are less than €0.5bn, where there are fewer than 10,000 members in the fund and whether the fund is closed to new increments or new members. The proposed amendments to the form of the AOTP are intended to clarify the level of reliance that the HoAF is placing on others, whether there are material limitations within the calculation of the TPs and any recommendations for improvement. These amendments to the AOTP are set out in track changes in the Appendix to the consultation paper.
It is proposed that the With-Profits governance requirements will not be applied to currently authorised (re)insurers with existing books of With-Profits business until 1 January 2020 to allow time to implement these requirements.
Submissions can be emailed to firstname.lastname@example.org and the closing date for submissions is 14 September 2018.
The Central Bank's consultation paper is here.
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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.