Most of the provisions of the Companies Act 2014 (the Act) are expected to be commenced on 1 June 2015. Many insurers and reinsurers that take the form of private companies limited by shares will be aware that, assuming they intend to convert to a "Designated Activity Company" (DAC)1, they must do so within 15 months of commencement of the Act.
The result of conversion to a DAC is that the name and legal status of the Company will change. This will bring with it more than just changes to constitutional documents. It will also necessitate some work on the part of insurers' and reinsurers' legal and compliance teams, or their external advisors, to see what must be communicated to policyholders, regulators and other contractual counterparties in relation to these changes. While the Act will also impact plcs and SEs, they will not be required to change name and legal form.
The following is a high level reference point/checklist for in-house counsel, compliance officers and ultimately, for the boards of directors of all insurers and reinsurers that currently take the form of private companies limited by shares:
- Review conditions of authorisation to see if Central Bank of Ireland (CBI) consent/confirmation of no objection to proposed changes to constitutional documents is needed.
- Explore the need for communication of changes with policyholders, cedants, and reinsurers/retrocessionaires and the necessary timing of such communications. For example, the Insurance Act 1989 requires life assurers to communicate changes in name and legal form to policyholders individually. This potentially includes policyholders worldwide.
- Check legal implications in all jurisdictions where the company carries on business. For example, insurers and reinsurers with foreign branches, whether in or outside the EU, may find that they need to notify or make filings with competent authorities and companies registries in those jurisdictions. In some cases, it may also be necessary to communicate the changes to local policyholders.
- Amend product literature: For direct insurers dealing with Irish consumers, it will be necessary to amend terms of business, key features documents and policy documentation to reflect the change of name and legal status. It is not, however, necessary to issue revised documentation in respect of existing policies.
- Update letterhead, website, email footers and company seals.
- Review all key contracts to ensure that it is not necessary for a change of name or legal form to be notified to or approved by the contract counterparty.