Minister for Finance and Public Expenditure and Reform Paschal Donohoe signed the EU (Insurance Distribution) Regulations 2018 (the IDD Regulations) into national law in June 2018. However, the implementation of the IDD Regulations was postponed until 1 October 2018 to provide the insurance industry with additional time to put in place the necessary organisational and technical changes required to ensure compliance. This article reviews the key changes resulting from the IDD Regulations.
The Minimum Competency Code 2017 has been introduced to incorporate the implementation of the EU Insurance Distribution Directive, the EU Markets in Financial Instruments Directive II and associated European Securities and Markets Authority guidelines and the European Regulations 2016. The main changes under the code relate to the qualification and experience requirements of the staff of financial services providers.
The EU Solvency II Directive was transposed into domestic Irish law by the European Union (Insurance and Reinsurance) Regulations. The Solvency II regime provides welcome clarity regarding the functions that an insurer may outsource and the requirements which must be complied with before outsourcing. This is particularly welcome news for captive insurers which tend to rely heavily on outsource service providers.
The Central Bank of Ireland's Fitness and Probity Regime has been reviewed to determine its compatibility with the EU Solvency II Directive. A number of amendments are set to be made to the regime for all (re)insurance undertakings, including changes to key function holders, outsourcing key functions, the head of the actuarial function and the removal of the chief actuary and signing actuary.
The European Union (Insurance and Reinsurance) Regulations 2015 were recently signed by the minister for finance, transposing the EU Solvency II Directive into Irish law. The regulations establish new capital requirements, valuation techniques and governance and reporting standards. They also provide the Central Bank of Ireland with increased supervisory responsibilities.
The Central Bank recently published a revised Corporate Governance Code for Credit Institutions and Insurance Undertakings. The revised code will apply to all credit institutions and insurance undertakings (including reinsurers, but excluding captives) licenced or authorised by the Central Bank. It imposes minimum statutory requirements on how these undertakings should organise the governance of their institutions.
The Central Bank published a consultation on the review of the Corporate Governance Code for Credit Institutions and Insurance Undertakings. Proposed amendments include prohibiting the chairman or chief executive officer (CEO) from holding more than one chairman or CEO position in another credit institution or insurance undertaking at any one time.