To read the full edition of the Insurance Newsletter, Autumn 2011, click here.
The Central Bank Reform Act 2010 (the "Act") created for the first time a harmonised statutory system for the regulation of persons performing controlled functions in entities in Ireland regulated by the Central Bank of Ireland (the "Central Bank") including financial institutions and insurance undertakings.
The Central Bank has now published details on how this system is to be implemented by way of the following documents:
The Central Bank Reform Act 2010 (Section 20 and 22) Regulations 2011 (SI 437 of 2011) (the "Regulations") The Fitness and Probity Standards (the "Standards"); and Draft Guidance on the Fitness and Probity Standards (the "Guidance"). Part 3 of the Act provides that a person performing a controlled function must have a level of fitness and probity appropriate to the performance of that particular function. The Regulations, which come into operation on 1 December 2011, prescribe certain controlled functions (each a "CF") and more senior pre-approval controlled functions (each a "PCF"). Descriptions of a CF include advising in relation to the provision of a financial service, assisting a customer in making a claim under a contract of insurance and any function which is related to ensuring, controlling or monitoring the compliance by a regulated entity of its relevant obligations. Examples of a PCF include directors (both executive and non-executive), chief executive and in respect of insurance undertakings, the head of underwriting, the head of investment and the chief actuary.
Alongside the Regulations, the Central Bank has released the Standards for a person performing a CF or a PCF. The Standards, which apply to persons performing a CF or a PCF in such an organisation, are built on the requirement that each person performing these functions must be:
competent and capable; honest, ethical and act with integrity; and financially sound. More particularly, to satisfy the Standards, the relevant person performing a PCF or a CF must:
have the necessary qualifications, experience, competence and capacity; have the necessary organisational knowledge; not have been prohibited or restricted, in any jurisdiction, from carrying on a business that requires a licence or authorisation; not have been the subject of a complaint to the Central Bank, Financial Ombudsman or equivalent body; not have been convicted of any relevant criminal...