On 25 August 2017, the Minister for Finance published the European Union (Insurance and Reinsurance) (Amendment) Regulations 2017 (S.I. No. 384 of 2017) (the "Amending Regulations"). The Amending Regulations apply with immediate effect and implement a number of corrections to the European Union (Insurance and Reinsurance) Regulations 2015 (the "2015 Regulations") and the Insurance Act 1989 (the "1989 Act") in order to more accurately reflect the provisions of the Solvency II Directive.
The Amending Regulations introduce some key changes including:
- Exempting third-country reinsurers, exclusively carrying on reinsurance activity in Ireland, from the scope of the application of the 2015 Regulations.
- Granting the Central Bank of Ireland (the "Central Bank") the power to impose (as well as vary and revoke) conditions of authorisation on third-country insurance branches authorised pursuant to Regulation 176 of the 2015 Regulations with a view to ensuring that the branch carries out in a proper manner the responsibilities imposed under the 2015 Regulations.
- Amending Regulation 261 of the 2015 Regulations, dealing with the fit and proper requirements applicable to persons running "insurance holding companies" and "mixed financial holding companies" (as defined), in a number of ways:
- Such holding companies are now obliged to notify the Central Bank within 5 working days of any change to the identity of the persons that effectively "run" those companies.
- The notification must provide the Central Bank with sufficient information to enable it to assess whether the person in question is fit and proper to perform their duties (noting though, as yet, the Central Bank has not explicitly defined what constitutes "sufficient information" in this context).
- Any appointment purporting to effect such a change which is not notified in a compliant manner will be deemed void (this provision may raise certain extra-territorial issues that would need to be examined).
- Such undertakings are no longer required to inform the Central Bank immediately in the event that a previously appointed person ceases to perform the relevant function, unless that person has been replaced because she/he no longer complies with a relevant standard of fitness and probity issued by the Central Bank.
- Interestingly, it is no longer considered an offence under the 2015 Regulations for a relevant undertaking to breach the notification requirement without a reasonable excuse. That said, it is important for (re)insurers to be aware of this notification requirement and furthermore, ensure that it is highlighted at a group level.
- Reinsurance undertakings with an Irish head office must now receive the approval of the Central Bank before they can transfer all or part of their portfolio to another undertaking.
- Finally, the Amending Regulations provide that insurance companies to which the 2015 Regulations apply (other than certain run-off companies) are not required to comply with Sections 14 and 15 of the 1989 Act. Section 14 deals with the separation of assets and liabilities when accounting for life assurance business and Section 15 provides for the manner in which assets of undertakings transacting life assurance business are to be applied.