Domestic News - August 2018
CENTRAL BANK PUBLISHES SPECIAL EDITION OF INTERMEDIARY TIMES ON THE INSURANCE DISTRIBUTION DIRECTIVE (IDD)
On 13 August, the Central Bank published a special edition of the Intermediary Times regarding implementation of and compliance with the IDD, which will take effect on 1 October 2018. In particular, the Central Bank encourages firms to consider if their activities fall within the definition of "insurance distribution" which is contained in the European Union (Insurance and Reinsurance) Distribution Regulations 2018 (IDR) and is more expansive than the definition of "insurance mediation" contained in the current Insurance Mediation Directive. This is particularly relevant for website comparison operators and ancillary insurance intermediaries whose activities may fall within the scope of the IDR and may be required to register with the Central Bank.
Once commenced, the IDR will amend the Investment Intermediaries Act 1995 (IIA) to remove "insurance policies" from the definition of investment instrument. The Central Bank has clarified that if an insurance intermediary holds its IIA registration to provide insurance policies only, in addition to its IDR registration, it should voluntarily revoke its IIA registration by using the revocation form available on the Central Bank's website.
This edition of the Intermediary Times also discusses the enhanced conduct of business and transparency rules that will apply to insurance intermediaries under the IDR, such as rules on cross-selling, conflict of interests, tied agents and product oversight and governance. In particular, intermediaries are reminded of the requirement to hold ring-fenced professional indemnity that covers the whole territory of the Member States in which they operate or some other comparable guarantee against liability arising from professional negligence. EIOPA is currently in the process of reviewing the existing minimum PII levels, which are likely to be revised upwards upon completion of this review. Please see the June/July edition of Arthur Cox Insurance Regulatory Update for more information on EIOPA's regulatory technical standards on PII.
The Central Bank's special edition of the Intermediary Times is here.
FURTHER CONSULTATION ON THE RENEWAL OF POLICY OF INSURANCE REGULATIONS 2007:CP124
Following on from CP 114, the Central Bank has published a second consultation paper regarding proposed amendments to the Non-Life (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (the Renewal Regulations). The consultation is seeking feedback from stakeholders regarding whether, for comparative purposes, insurers should be required to provide the previous year's premium in renewal documentation issued to clients. With regard to mid-term adjustments, the Central Bank is proposing one of two options be adopted:
Option 1: that the premium total from inception of the policy and the cost of any midterm adjustment(s) be provided separately, excluding fees or charges; or Option 2: provide an annualised premium figure following mid-term adjustment, excluding fees or charges associated with the adjustment. The consultation paper also includes details of the feedback received from the Central Bank's first consultation, CP114...