Insurance Regulatory Update - November 2016

Author:Ms Elizabeth Bothwell and Jennifer McCarthy
Profession:Arthur Cox
 
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IN DOMESTIC NEWS...

CBI ISSUES FAQS ON ITS GUIDELINE FOR SOLVENCY II (RE)INSURANCE UNDERTAKINGS ON DIRECTORS' CERTIFICATIONS

On 28 November, the Central Bank issued a Frequently Asked Questions (FAQ) document in relation to their Guideline for Solvency II (Re) Insurance Undertakings on Directors' Certifications which was published in August 2016. The guideline sets out the requirements for all Solvency II (re)insurance undertakings from 2016 onwards in relation to directors' certification. This FAQ document should be read alongside the guideline as it was drafted to reflect, and in anticipation of, questions in relation to the guideline.

A link to the FAQ document is here.

CBI INSURANCE DIRECTORATE PUBLISHES UPDATE ON CURRENT ISSUES IN GENERAL INSURANCE

On 17 November, the Insurance Directorate of the Central Bank published slides from an update on the current issues in general insurance.

The slides deal with the increasing number of injury claims and the resulting increase in the price of premiums and addressed the relationship between investment income decline and increasing competition. Motor profitability challenges were also discussed with the aid of various graphs which showed that the change in price did not occur immediately but rather after a time lag.

Another topic which the presentation touched on was developing the role of the actuarial function with the focus on opinions to boards and protection of the consumer. The slides outline the Central Bank's regulatory focus in relation to settlement of injury claims, collaboration with other regulators, on-site inspections and the creation of an analytical platform.

A link to the presentation is here.

CBI ISSUES CONSULTATION PAPER IN RESPECT OF THE MINIMUM COMPETENCY CODE 2011

On 21 November, the Central Bank issued Consultation Paper 106 setting out amendments to the Minimum Competency Code 2011 (MCC). The Central Bank has made a distinction between amendments on which it is not specifically seeking observations and proposals on which it is consulting.

The Central Bank is not consulting on the amendments required to be made as a result of developments under EU legislation. The Central Bank will introduce reforms to amend Parts 1, 3 and appendices 1-4 of the MCC to comply with this legislation. It also intends to replace Part 2 of the existing MCC, which imposes obligations on regulated firms, with regulations.

Proposed amendments to the MCC on which the Central Bank is requesting the opinion of stakeholders fall under five headings: qualifications and experience requirements; devising or otherwise creating products; credit unions; members of the board of a mortgage credit intermediary; and reinsurance.

Responses to the consultation paper should be submitted by 15 February 2017.

A link to the consultation paper is here.

DIRECTOR OF INSURANCE SUPERVISION ADDRESSES IRISH BROKERS ASSOCIATION

On 17 November, Sylvia Cronin, the Central Bank's Director of Insurance Supervision, addressed the Annual General Conference of the Irish Brokers Association.

Ms Cronin discussed the new regulations brought in by Solvency II and the impact it had on insurance undertakings that brokers partner with. She also specifically referenced the publication by EIOPA, in April this year, of guidelines relevant to brokers on Product Oversight and Governance Arrangements by Insurance Undertakings and Insurance Distributors.

Ms Cronin spoke about the importance of culture and the outcomes that the Central Bank want to see as a result of the attitude and behaviour of actors in the financial services industry. She referred to the need to provide the "right product for the right consumer at the right time" and how to best to achieve this aim. She also touched on the benefit of engaging with customers and providing feedback to insurance companies.

Ms Cronin dealt with the increasing cost of motor insurance premiums and the duty brokers have to help prevent insurance fraud. Ms...

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