DEPARTMENT OF FINANCE PUBLISHES QUARTERLY UPDATE ON THE COST OF MOTOR INSURANCE WORKING GROUP – FOURTH PROGRESS UPDATE Q4 2017

On 20 February 2018, the Department of Finance published its quarterly update on the implementation of the action plan of the Report on the Cost of Motor Insurance. It provides an overview of the work each relevant Department has undertaken during the last quarter of 2017. The key findings of the report showed that:

  • The complex scale and nature of the work resulted in the working group failing to meet some goals within their deadlines such as the establishment of the National Claims Information Database legislation, but also notes progress made by the members of the working group.

  • 10 of the 14 actions on the action plan scheduled for delivery in Q4 2017 were fully completed. Of the four remaining, three relate to legislation which have been delayed; while legislation has been advanced to establish the National Claims Information Database it is not yet finalised. Also the publication of Heads of Bill to extend Pre-Action Protocols to personal injury cases has been delayed. Legislation to underpin the protocol agreed with Insurance Ireland to facilitate the communication of the reasons for large increases in premiums to consumers, requires further discussion and a subsequent final agreement to be put in place.

  • Outstanding actions from prior quarters include: the action from Q1 2017 to establish a reliable set of data and commence review of impact of legal and other fees on personal injury awards which is contingent on the establishment of the new office of the Legal Costs Adjudicators (expected July 2018). Furthermore, the two remaining issues from Q3 2017 require the establishment of extensive cooperative mechanisms between Insurance Ireland and An Garda Síochána to be formalised, which remains subject to the approval of both the Minister for Justice and the Garda Commissioner.

The report may be found here.

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DEPARTMENT OF FINANCE PUBLIC CONSULTATION ON CENTRAL BANK (NATIONAL CLAIMS INFORMATION DATABASE) BILL

Following the Cost of Insurance Working Group's recommendation to establish a National Claims Information Data Base for the collection claims data, the Department of Finance has published the general scheme of the Central Bank (National Claims Information Database) Bill (the “General Scheme”) and has launched a public consultation on the proposed bill. The objective of the proposed National Claims Information Data Base (the “Data Base”) is to facilitate transparent and accurate pricing of non-life insurance premiums.

Under the General Scheme it is proposed that the Central Bank will establish and maintain the Data Base and have the power to collect data from insurers on: premium and other income; size of exposure; business expenses and MIBI payments; number and nature of insurance claims; details of costs and provisions associated with settling insurance claims; and details of large claims. The Central Bank will also have the power to penalise insurers who do not provide the mandated information. The Data Base is to be funded by industry levies imposed by the Central Bank and/or by the Exchequer (in the case of a shortfall). The Central Bank will also be required to publish an annual report identifying factors influencing the price of premiums in the Irish non-life insurance market.

The consultation is open until 9 March 2018 and responses can be sent by email to insurance@finance.gov.ie.

The Department of Finances consultation paper is here and the General Scheme is here.

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INSURANCE IRELAND RESPONDS TO THE EUROPEAN COMMISSION CONSULTATION ON INSTITUTIONAL INVESTORS AND ASSET MANAGERS' DUTIES REGARDING SUSTAINABILITY

In its response to this consultation, on 1 February, Insurance Ireland notes that there are still various challenges and barriers arising in the full incorporation of Environmental, Social and Governance (ESG) factors into insurers’ business models and investment strategies. The availability of consistent and quality data to resist with the identification, measurement and assessment of ESG factors is a significant constraint. For smaller insurers, the necessary accumulation of resources and expertise amounts to a barrier to enhanced engagement in sustainability issues. Insurance Europe notes that investing in a responsible/sustainable way involves developing a strategy, which can be implemented in relation to all assets, not just certain assets and called for an increased supply of appropriate assets for all insurers that meet the sustainability criteria, as well as quality and security requirements. It is important for the industry that the framework is clear and detailed as it is developed at a European and international level.

The press release may be found here.

Insurance Ireland’s comments may be found here.

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DATA PROTECTION BILL 2018

On 1 February, the Data Protection Bill 2018 (the Bill) was published, which will transpose the elements of the General Data Protection Regulation (EC/2016/679) (GDPR) that require national implementation, and the Law Enforcement Directive (EC/2016/680) into Irish law. Article 44 of the Bill provides for the processing of special categories of personal data for insurance and pensions purposes: data concerning health which may be processed where it is necessary and proportionate for the purposes of: a policy of insurance, life assurance, health insurance or health-related insurance; an occupational pension; a retirement annuity contract; or the mortgaging of a property.

The Bill must be enacted in time for the transposition deadline of the Law Enforcement Directive on 6 May 2018 and the GDPR effective date on 25 May 2018.

The Bill and Seanad explanatory memorandum are here.

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SPEECH BY DEPUTY GOVERNOR, PRUDENTIAL REGULATION, ED SIBLEY ON THE IMPORTANCE OF DIVERSITY IN FINANCIAL SERVICES

On the 13 February, Deputy Governor Ed Sibley, of the Central Bank of Ireland, delivered a speech on the important role diversity and inclusion plays in financial services at the first Financial Services Inclusion Network (FuSIoN) event of 2018. The key points of note from this speech are as follows:

  • despite the meaningful strides taken by the Central Bank, more work has to be done to further inclusion and diversity, both internally and externally, to ensure its key role within the model of regulation;

  • teams with greater diversity are in a stronger position to avoid group think, to challenge assumptions and engage with creative and complex problem solving, in particular at a senior level;

  • diversity and inclusion play an important role in the hiring process and in encouraging the long-term commitment of employees;

  • the low level of progress in the financial service sector is concerning, with approximately 80% of the most senior and influential appointments in regulated firms in Ireland between 2012 and 2016 being male; and

  • the Central Bank plan to increase supervision over diversity in the work place and the policies of firms. The Central Bank sees it as a major step forward to including aspects of diversity in the upcoming Behaviour and Culture Review of the retail banks, which it intends to roll out in any reviews of other financial services sectors.

The full speech may be found here.

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