Insurance Regulatory Update, August 2013

Author:Ms Elizabeth Bothwell and Jennifer McCarthy
Profession:Arthur Cox
 
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CENTRAL BANK PUBLISHES CONSULTATION ON THE REVIEW OF THE CORPORATE GOVERNANCE CODE FOR CREDIT INSTITUTIONS AND INSURANCE UNDERTAKINGS

On 1 August 2013, the Central Bank published a consultation paper on the Review of the Corporate Governance Code for Credit Institutions and Insurance Undertakings (CP69). It contains a summary of the most significant proposed amendments as follows: (1) Risk Committees: an amendment to require that the risk committee be composed of a majority of non-executive directors, with a non-executive director as Chairman; (2) Chief Risk Officer: a new requirement for all institutions to appoint a Chief Risk Officer; (3) Board Meetings: (i) an invitation to comment on the number of board meetings which High Impact Institutions1 must hold per year; and (ii) an amendment to the requirement that all non-High Impact Institutions hold their four board meetings in separate calendar quarters so they must now hold one meeting per half year with the other two meetings scheduled as the board deems appropriate; (4) Chairman: a proposal to permit a Chairman of subsidiaries of groups of Medium-High, Medium-Low or Low- Impact Institutions to hold more than one Chairman position within the same group of companies; (5) Chief Executive Officer: a proposal to allow a CEO of a Medium-Low or Low-Impact Institution to hold up to two additional CEO positions in credit institutions or insurance undertakings which are designated as either Medium-Low or Low-Impact Institutions; (6) Committees of the Board: a proposal to require an individual who is the Chairman of an audit committee to be a member of the risk committee and vice versa provided that, in respect of High- Impact Institutions, there would be a prohibition on the Chairman of the risk committee and audit committee being the same individual simultaneously; (7) Annual Compliance Statement: a proposal to allow institutions file annual compliance statements in accordance with their financial reporting period (if this differs from the calendar year); and (8) Board Responsibilities: a proposal that five particular board responsibilities are set out in a more specific manner.

In addition, the Central Bank is seeking feedback in respect of (1) whether specific diversity requirements regarding gender ratios on boards should be introduced; and (2) whether the current limitations on the number of directorships one person can hold are appropriate. The closing date for submissions is 1 October 2013 and the Central Bank anticipates a revised Corporate Governance Code will be published in December 2013, allowing a reasonable time period for institutions to comply with the revisions.

A link to CP69 is here

INSURANCE COMPRISES 50% OF COMPLAINTS RECEIVED BY FINANCIAL SERVICES OMBUDSMAN

On 21 August 2013, the Financial Services Ombudsman (the FSO) published his Office's Bi-Annual Review 2013 (the Review). The Review provides detail on the complaints received and handled by the FSO for the period 1 January - 30 June 2013. The Review analyses the trends of various complaints and sets out a summary of the number of complaints received. It outlines...

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