On 7 February 2017, the Central Bank of Ireland (the "Central Bank") published the 15 responses received to its recent Discussion Paper on Payment of Commission to Intermediaries which was issued in July 2016. The purpose of the Discussion Paper was to generate discussion and feedback on the risks and benefits to consumers of the practice of insurers (and other financial firms) paying commission to intermediaries which distribute their products. Along with its engagement with consumer bodies, the Central Bank has stated that the 15 responses received will inform ongoing consideration of its policy position on this subject.
The Central Bank now proposes to publish a Consultation Paper in Quarter 3 of 2017 containing proposals to introduce measures to strengthen protection for consumers in this area. Significantly, the Central Bank identified three headings under which it proposes to consider such measures, as follows:
- the acceptance and retention of commissions by intermediaries describing themselves as ‘independent’
- ways to mitigate product and producer bias where commission is paid, and
- where commission amounts are based on the volume of the product sold, including override commissions.
To view the responses to the Central Bank's Discussion Paper, please click here.