This briefing explains why Ireland is proving so attractive a location to the non-life insurance industry. It also explains the application process and the ongoing supervisory controls to which a non-life insurer is subject.  

Advantages of Ireland

There are many advantages to locating a nonlife insurance operation in Ireland:  

  • Ireland is a full member of the European Union and has implemented the Third Non- Life Directive so that non-life companies regulated by the Central Bank of Ireland (the “Central Bank”) can service all other EEA markets without the need for further authorisation (see paragraph on passporting at the end of this briefing for a summary of the required notification procedures);  
  • The Central Bank is widely regarded as a responsible yet responsive regulator – applications for authorisation typically take 3 months from the date of submission of a completed application to the Central Bank;  
  • It is a well developed non-life insurance market with many of the world’s leading insurers and reinsurers based here;  
  • Ireland’s close proximity to London enables easy interaction with brokers and other insurance and reinsurance entities operating in the London market;  
  • The standard rate of corporation tax on trading income is currently 12.5%;  
  • Ireland has an extensive network of double taxation treaties with most of the world’s leading industrialised nations. There are currently 69 signed treaties of which 64 are in effect;  
  • An exemption can be obtained from the 20% dividend withholding tax by many companies resident in, or controlled by residents, in EU member states or countries with which Ireland has a taxation treaty;  
  • No Irish stamp duty or premium taxes are payable on insurance policies where the risk is located outside Ireland;  
  • No value added tax is payable on the supply of insurance services; and  
  • With a plentiful supply of top quality legal, actuarial, accounting and insurance management service providers, there is an experienced pool of service providers.  

Authorisation Process  

When a group is considering Ireland as a location for a non-life insurance company, one of the initial steps it should take is to arrange a preliminary meeting with the Central Bank to discuss, at a high level, its proposed operations and its reasons for considering Ireland as a location. Thereafter, the applicant, generally with the assistance of local advisers, will prepare an application containing prescribed information, which is submitted to a dedicated (re)insurance authorisation team in the Central Bank. Following its review of the application, the Central Bank will typically issue a series of follow up queries to the applicant seeking additional information in respect of aspects of the application. Once the application is clear of comments from the authorisation team it will be submitted to a senior management committee for formal approval. An applicant cannot commence writing business until the Central Bank has granted the formal authorisation. There is currently no application fee payable to the Central Bank.  

Application to the Central Bank  

The applicant must provide detailed information to the Central Bank in relation to the proposed company. The information required is set out in a checklist issued by the Central Bank and the following is a nonexhaustive list of the information and documentation that would need to be prepared:

  • Overview of the parent/group to which the applicant belongs;  
  • Whether the parent/group is subject to consolidated supervision;
  • Ownership structure, including details of all qualifying shareholders;  
  • Applicant’s objectives and proposed operations, including product types; target markets; and distribution structure;  
  • Legal structure of the proposed company including its constitutional documents;  
  • Internal governance structures including details of the board of directors and senior management;  
  • Risk oversight arrangements, including: audit; compliance; risk management; underwriting; reinsurance; financial control; internal controls;  
  • What activities are to be outsourced (including oversight envisaged);  
  • Capital and solvency projections and financial information including required actuarial certification; and  
  • Consumer-related information, including distribution and policy administration processes and sample policy documents.  

Additionally, the Central Bank must be satisfied with the fitness and probity of the proposed shareholders and persons who will occupy controlled functions or pre-approval controlled functions, including: directors; senior management; and customer-facing staff. The relevant persons are required to complete an Individual Questionnaire in the prescribed form that should be submitted to the Central Bank with the application in accordance with the Central Bank’s fit and proper requirements.  

Authorisation in Principle  

When the Central Bank has approved the application and before the formal authorisation is granted, the applicant will receive confirmation of “authorisation in principle”. Attached to the “authorisation in principle” will be a list of conditions which the applicant must satisfy prior to final authorisation being granted. One important condition is a requirement on the applicant to provide evidence that the appropriate capital has been received by the proposed Irish entity, to enable it to satisfy its regulatory requirements in relation to the business projected in the application.  

Once all the relevant conditions have been satisfied, the formal authorisation is granted to the applicant and the Certificate of Authorisation will be issued.  

Ongoing Supervision  

Non-life insurers are supervised on an ongoing basis by the Central Bank. The principal requirements with which non-life insurers are required to comply derive from the European Communities (Non-Life Insurance) Framework Regulations 1994 (the “Framework Regulations”), which implement the Third Non- Life Directive in Ireland. Below is a description of some of the main ongoing requirements applicable to non-life insurers.  

Regulatory Capital Requirements  

Non-life insurers, once authorised by the Central Bank, must maintain technical reserves in respect of their underwriting liabilities. Those liabilities are calculated in accordance with the European Communities (Insurance Undertakings: Accounts) Regulations 1996, as amended, which implement Directive 91/674/EEC in Ireland. The assets representing the technical reserves must be valued in accordance with the rules in the Framework Regulations which set out in detail the description and admissibility limits for each type of asset that can be held for this purpose.  

Non-life insurers are required to establish and maintain an adequate solvency margin of assets free from all foreseeable liabilities. The detailed rules for calculating the solvency margin are contained in the Framework Regulations. Generally, the Central Bank will require a non-life insurer to maintain a solvency margin of 200% of the required minimum solvency margin for its first three years of operation. Thereafter, the non-life insurer can apply to the Central Bank for this to be reduced to 150%.  

Non-life insurers are also required to maintain a minimum guarantee fund. The amount of the guarantee fund must be equal to one-third of the solvency margin required to be established, subject to a minimum of €2,500,000 or €3,700,000, depending on the classes of non-life insurance written.  

Regulatory Returns

Non-life insurers are obliged to file quarterly and annual returns with the Central Bank. The returns comprise various forms and guidance on their completion is available on the Central Bank’s website.

On-site Supervisory Visits  

An important tool in the Central Bank’s supervisory regime is the carrying out of regular on-site inspections of non-life insurers. The scope of the inspection can be general in nature comprising a review of the non-life insurer’s operations, controls and corporate governance. Alternatively, themed inspections may be carried out on non-life insurers in relation to a particular matter.  

Prior to an inspection the non-life insurer will receive a letter of notification that will set out the scope of the inspection and any documentation that must be provided in advance to the Central Bank. The inspection itself, which generally takes about 5 days, is followed by a post-inspection report that identifies matters that must be addressed by the non-life insurer within timescales set by the Central Bank.  

Central Bank Guidelines  

In addition to the requirements imposed on non-life insurers by applicable legislation, nonlife insurers are required to comply with guidelines issued by the Central Bank in relation to the following:  

  • The appointment of a compliance officer;  
  • The filing of an annual directors’ compliance certificate and actuarial certification of the technical reserves with the regulatory returns; and  
  • Adopting suitable policies on asset management; the risk management of derivatives; and outwards reinsurance.  

The Central Bank’s Corporate Governance Code for Credit Institutions and Insurance Undertakings (the “Code”) applies to non-life insurers. Among other things, the Code sets out the roles of both executive and nonexecutive directors; rules on the composition of the board; requirements in relation to subcommittees of the board; and necessary policies and procedures (e.g. risk appetite statement; conflict of interests policy; and remuneration policy).  

Non-Life insurers are subject to the Central Bank’s risk based supervision framework called “PRISM” (Probability Risk and Impact System). PRISM is a software application and a supervisory tool designed to assess financial firms based on two distinct concepts – the impact on the economy and consumers in a crisis and the probability that problems will arise.  


Non-life insurers are entitled to distribute their products in all other EEA markets on either a freedom of establishment (“FOE”) or freedom of services (“FOS”) basis. While this facility does not require additional authorisation from the supervisory authorities in the target markets, non-life insurers are required to comply with local requirements in those markets including the so-called “conduct of business rules” applicable in each market. Additionally, prior to distributing into another market for the first time, non-life insurers are required to submit an appropriate notification to the Central Bank.  

An FOE notification must contain reasonably detailed information concerning the proposed branch operation including the branch manager; target market; and proposed business, and must be accompanied by financial projections for 3 years. The branch is entitled to commence operations at a date no later than 5 months after the date the completed FOE notification was filed with the Central Bank.  

An FOS notification is more straightforward and requires less information to be provided in respect of the business proposed for the target market. Additionally, the assessment period for the notification is far shorter and non-life insurers are entitled to commence operations on an FOS basis into another market within 1 month from the date that the relevant notification was filed with the Central Bank.