Insurance Regulatory Update - July 2016

Author:Ms Elizabeth Bothwell and Jennifer McCarthy
Profession:Arthur Cox
 
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JULY 2016 - THIS MONTH'S NEWS

DEPARTMENT OF FINANCE REVIEW OF THE FRAMEWORK FOR MOTOR INSURANCE COMPENSATION IN IRELAND GIBRALTAR FINANCIAL SERVICES COMMISSION (GFSC) TAKES STEPS TO WIND UP MOTOR INSURER WRITING BUSINESS IN IRELAND INSURANCE IRELAND SAYS ACTION MUST BE TAKEN TO TACKLE THE HIGH COST OF CLAIMS DRIVING UP PREMIUMS CENTRAL BANK PUBLISHES GUIDANCE NOTE ON APPLICATION FOR AUTHORISATION AS A RETAIL INTERMEDIARY EUROPEAN PARLIAMENT AND COUNCIL CONSIDER PRIIPS DELEGATED REGULATIONS EIOPA LAUNCHES EU-WIDE THEMATIC REVIEW OF MARKET CONDUCT REQUEST TO EIOPA FOR TECHNICAL ADVICE ON THE REVIEW OF SPECIFIC ITEMS IN THE SOLVENCY II DELEGATED REGULATION "CHANGES TO THE UFR BEFORE THE SOLVENCY II REVIEW UNNECESSARY" SAYS INSURANCE EUROPE UPDATES FROM THE INTERNATIONAL ASSOCIATION OF INSURANCE SUPERVISORS (IAIS) INSURANCE EUROPE UPDATED TOOL HIGHLIGHTS CONSUMER INITIATIVES ACROSS EU INSURER SECTOR UK FINANCIAL OMBUDSMAN SERVICE PUBLISHES OMBUDSMAN NEWS EIOPA AND DEPARMENT OF FINANCE PUBLISHES CONSULTATION PAPERS ON THE INSURANCE DISTRIBUTION DIRECTIVE EUROPEAN AND AMERICAN INSURANCE TRADE ASSOCIATIONS SUPPORT INCLUSION OF INSURANCE IN TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP (TTIP) INSURANCE EUROPE PUBLISHES STATISTICS FOR 2014 IN DOMESTIC NEWS...

DEPARTMENT OF FINANCE REVIEW OF THE FRAMEWORK FOR MOTOR INSURANCE COMPENSATION IN IRELAND

The joint working group established by the Department of Finance and the Department of Transport, Tourism and Sport to review motor insurance compensation in Ireland has issued its report. This arises out of the liquidation of Setanta Insurance in 2014, which highlighted the flaws in the current compensation framework when controversy arose as to whether the Irish Insurance Compensation Fund (ICF) or the Motor Insurance Bureau of Ireland (MIBI) was responsible for unpaid claims of the insolvent insurer. The High Court ruled that MIBI was responsible and this was upheld by the Court of Appeal. MIBI has subsequently appealed to the Supreme Court, scheduled for hearing in late October 2016.

The report gives background to the current compensation framework and the legislation underpinning it and examines a variety of insurance compensation frameworks in other jurisdictions before finally evaluating all of the key issues relating to the current insurance compensation framework. It then makes a series of recommendations to provide certainty to the framework for insurer compensation in Ireland. Its key recommendations cover issues such as coverage, eligibility and limits, funding, governance and administration and reporting obligations to establish an efficient motor insurance database. Additional recommendations will be published over the coming months as part of a more far-reaching review of the current framework. After providing information to the Government, the relevant Ministers will be responsible for taking steps to implement these recommendations.

A link to the report can be found here.

GIBRALTAR FINANCIAL SERVICES COMMISSION (GFSC) TAKES STEPS TO WIND UP MOTOR INSURER WRITING BUSINESS IN IRELAND

On 22 July, the Central Bank was notified by the GFSC that it has taken steps to wind up insolvent insurer, Enterprise Insurance Company plc (Enterprise). Similar to Setanta, the Maltese motor insurer that went into liquidation in July 2014, Enterprise has issued motor insurance cover into the Irish market. The Central Bank has put a useful statement on its website regarding steps that affected policyholders should take if they have concerns about their insurance cover, together with relevant contact details. An FAQ has also been uploaded.

A link to the statement and FAQ can be found here and here.

INSURANCE IRELAND SAYS ACTION MUST BE TAKEN TO TACKLE THE HIGH COST OF CLAIMS DRIVING UP PREMIUMS

Insurance Europe again calls for the adoption of measures to address the high cost of claims driving up premiums. The huge increase in both the quantity and level of Irish awards has resulted in instability and uncertainty in the claims environment and a corresponding increase in premiums. Stability in this sector for the...

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