The Central Bank recently published the findings of its Thematic Inspection of Retail Intermediaries acting as Managing General Agents (MGAs), selling private motor insurance. The inspection followed on from a Central Bank letter issued to all MGAs in May 2017 reminding them of their obligations in relation to transparent disclosure of key information to consumers.
The key findings of the report are that MGAs do not adequately disclose key information regarding the identity and domicile of the underlying insurer, resulting in poor consumer understanding.
While all MGAs inspected had contingency plans in place to deal with the event of an insurer leaving the Irish market as a result of Brexit, the majority of the firms inspected did not have their contingency plans formally documented. The Central Bank also found that MGAs did not have formal plans in place to demonstrate preparedness for the product oversight and governance requirements under the European Union (Insurance Distribution) Regulations 2018, prior to their implementation on 1 October last. Firms were reminded that they are expected to have a formal plan in place to ensure compliance with the product oversight and governance requirements of the new regulations. The report also uncovered that there are mixed levels of due diligence undertaken by MGAs regarding the insurers and underlying retail intermediaries they engage with. The Central Bank also identified some incidents of poor claims management practices in line with the Consumer Protection Code.
The Central Bank is engaging with the MGAs that gave rise to concern and have imposed formal supervisory requirements with specific timelines for remediation.
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.