Reinsurance Regulation In Ireland

Author:Ms Paula Kelleher
Profession:Dillon Eustace
 
FREE EXCERPT

A New Regime For Reinsurance Regulation In Ireland The European Communities (Reinsurance) Regulations 2006 (the "Reinsurance Regulations" or "Regulations"), which give effect to Directive 2005/68/EC (the "Directive"), came into effect on 15 July 2006. The Reinsurance Regulations, under the supervision of the Irish Financial Regulator (the "Financial Regulator") establish a new regulatory framework for the authorisation and regulation of reinsurers and provide a separate regime for 'special purpose reinsurance vehicles' ("SPRVs") whilst imposing particular requirements for the carrying on of 'finite reinsurance'. Those familiar with the regulatory regime for nonlife insurers will find similarities in the approach taken with the Reinsurance Regulations as the latter are largely based on the non-life insurance regime. The Old Regulatory Regime Historically, the activities of reinsurers in Ireland were not supervised by the Irish regulatory authorities. Irish reinsurers were not required to submit accounts or maintain a solvency margin, but likely maintained both internally as a matter of good business practice. This environment changed, however, with the Insurance Act, 1989 (the "1989 Act"), which introduced the first regulatory measures to the industry. Section 22 of the 1989 Act required reinsurers to identify themselves to the Irish regulatory authorities but did not require them to provide significant details of their business operations. However, the measure did allow the authorities to keep track of the number of companies operating in the Irish reinsurance market. Section 22 was amended by the Insurance Act, 2000 which introduced some transparency to the Irish industry by requiring undertakings that wished to carry on reinsurance business to give at least 30 days notice of such intention to the Financial Regulator. Such undertakings were also required to submit certain information including details of ownership and share capital, information about directors and senior management and a statement of the risks proposed to be covered and related policy and other arrangements. The Financial Regulator had the power to direct a reinsurer to cease carrying on business on a number of grounds including where the undertaking was undercapitalised, had an insufficient number of suitably qualified members of management or staff or had engaged in illegal operations outside Ireland. The New Regulatory Regime – The Reinsurance Regulations The Reinsurance...

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