Domestic News


The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act, 2018 (2018 Act), which gives effect, in part, to the Fourth EU Anti-Money Laundering Directive (2015/894) under Irish law was commenced on 26 November 2018. The 2018 Act increases the obligations on regulated firms to put in place systems and controls to prevent and detect money laundering and terrorist financing.

On 21 December, the Central Bank published Consultation Paper 128, which contains draft guidelines (the Guidelines) that set out the expectations of the Central Bank in respect of firms’ compliance with their AML/CFT obligations following the enactment of the 2018 Act. The Central Bank invites general feedback on the Guidelines from interested stakeholders, including regulated financial firms and requests that respondents consider the specific questions contained in section 5 of the Consultation Paper.

Respondents are required to submit their feedback by email using the template provided in schedule 2 of the Consultation Paper to The closing date for making submissions is 5 April 2019.


The Central Bank has published its quarterly newsletter for Q4 2018, which contains articles on Brexit preparedness, recent observations from a thematic review of underwriting, as well as recent supervisory updates from the Central Bank and EIOPA. Supervisory Priorities for the Insurance Directorate for 2019 are identified as financial and operational resilience, industry response to disruptive changes, consumer protection and culture and diversity.

On the issue of Brexit preparedness, the Central Bank provides an overview of the notification process and the eligibility criteria for Irish insurers to avail of the UK Government’s Temporary Permissions Regime after the withdrawal date. Under the UK EEA Passport Rights (Amendment) Regulations 2018 an insurer that is authorised to carry on regulated activities in the UK through a freedom of establishment or freedom of services passport can obtain a Part 4A permission to carry on those activities for a maximum of three years, while they seek authorisation as an insurer or third country branch from the UK PRA. The Central Bank also reminds firms of the expectation to inform prospective and existing customers of the potential impact that Brexit may have on their ability to service their contracts and of the relevant contingency measures being taken to ensure service continuity after 29 March 2019.

Feedback from the Central Bank’s thematic review of underwriting is also contained in this edition of the newsletter. While some firms demonstrate good progress since 2016, two thirds of all firms will be issued with a risk mitigation plan. Among the Central Bank’s key findings are the need for actuarial opinions: to include all material underwriting policies and processes; be forward looking and take into account planned changes to the business; consider the links between underwriting and other aspects of the business; and be based on up to date data.


This bumper edition of the Intermediary Times focuses on the key supervisory and regulatory issues that affected insurance intermediaries in 2018. The newsletter includes articles on:

Brexit contingency planning; the Intermediaries Road Show; the 2018 Central Bank funding levy; findings from the Central Bank’s thematic inspections regarding Managing General Agents and the Sale of Gadget Insurance; CPD requirements under the Minimum Competency Code for grandfathering applicants; and observations from recent Anti-Money Laundering (AML) inspections.

Following feedback received by the Central Bank on the industry funding level, the Central Bank has made some amendments to the Intermediary Funding Model. All firms are now required to pay the minimum levy of €1,020. Firms whose fee and commission income exceeded €200,000 in 2018 are also required to pay an additional variable levy rate of 0.32% of their income.

Observations from recent AML inspections included insufficient evidence that staff in senior roles were appropriately trained and that training records maintained by firms were inadequate.

The Central Bank also reminds firms in the process of transferring or ceasing their regulated operations of their obligations under rule 3.11 of the Consumer Protection Code 2012 regarding the notification/treatment of customers in such circumstances and notification to the Central Bank. Notifications under rule 3.11 can be made to the Central Bank at Following a review of the notification the Central Bank will follow-up with firms before the transfer is complete. Those firms seeking to cease operating can do so by submitting a completed revocation form to


The European Union (Insurance Distribution) (Amendment) Regulations 2018 were signed into law on 5 December 2018. 

The Regulations amend the provisions of the European Union (Insurance Distribution) Regulations 2018 relating to the exercise of the freedom to provide services; complaints procedures; the division of the competence between home and host Member States; and cooperation between competent authorities on freedom of establishment – home Member State. 


The Central Bank has published Brexit FAQs for consumers, which provides information on the potential impact of Brexit on consumers.  It includes specific answers to questions on insurance, such as whether consumers will continue to be covered by their policy after 29 March 2019; if they can renew their policy and what the Central Bank is doing to protect Irish consumers covered by policies with UK insurers and brokers. 

The Brexit FAQs for financial services firms (originally published in July 2017) have also been recently updated. They outline how the Central Bank is dealing with Brexit including the Central Bank’s approach to authorisation; whether it allows outsourcing to the UK; and how it will process applications for approval of models under Solvency II where the model has been approved by the UK PRA. 

International News


EIOPA has published a report – Insurance Distribution Directive – Evaluation of the Structure of Insurance Intermediaries Markets in Europe – together with an annex containing a Country-by-Country Analysis. 

Although national variations in registration practices, reporting frameworks and categories of intermediaries hampered the ability of EIOPA to draw conclusions on the intermediary market at a European level, it was able to identify some trends including significant variations in the size of insurance intermediaries markets and a small decrease in the number of registered intermediaries (primarily natural persons and agents) which may be due to more stringent regulatory requirements and the growth of alternative distribution channels.  It notes also that there is a small but increasing role of direct insurers in distribution, particularly on the life side. Although the data is patchy, it appears that cross-border business is increasing. Remuneration models are predominantly either commission based (majority) or fee based.

In Ireland, EIOPA’s analysis revealed a period of contraction in the number of regulated firms in the last number of years but an increase in the number of Managing General Agents.  Notifications from intermediaries intending to carry out cross-border business have also increased.  According to the data, there are approximately 2,200 regulated insurance intermediaries in Ireland (excluding credit institutions and credit unions) of which 92% have less than 10 employees and 46% have only one employee.  Estimates by the Central Bank indicate that 51% of all insurance products sold by Irish authorised insurers or insurers authorised in another Member State with a branch in Ireland, are sold through insurance intermediaries. 


On 10 December, EIOPA responded to the European Commission’s consultation on a Commission Delegated Regulation amending the Solvency II Delegated Regulation (EU 2015/35).

The proposed Regulation reflects EIOPA’s advices, including its suggested modifications to the design of the interest rate risk sub-module. The letter refers to EIOPA’s continued investigation on the treatment of illiquid liabilities and related investments. As the Commission proposes to reduce the capital charge for a portfolio of long-term liquidity investments backing long–term liabilities by 22%, EIOPA calls on the Commission to post-pone making such an amendment to the Solvency II Delegated Regulation until it has taken account of the outcome of EIOPA’s analysis.

EIOPA raises practical concerns regarding the Commission’s proposal to modify the general provisions on the relevant risk-free interest rate term structure. In particular, the proposed definition of a “substantial change” is, in their view, too wide and could affect market consistent valuation of technical provisions.

Separately, the Commission has published feedback that it has received from various interested stakeholders on its recent consultation, including Insurance Ireland and Insurance Europe, both of whom argue that the Commission’s failure to reassess the risk margin cost of capital represents a missed opportunity as the 6% cost of capital, a key element of its calibration, is too high.


EIOPA published its report on the 2018 Insurance Stress Test on 14 December. The stress test assessed the insurance industry’s resilience to shocks and catastrophes in the insurance market, with 42 (re)insurance groups, covering 75% of the market, taking part.

The results demonstrated that, even in the three extreme test scenarios, there were no concerns regarding the industry’s ability to pay claims as the sector is sufficiently capitalised to absorb shocks. EIOPA and national competent authorities plan to further analyse the results to obtain a deeper understanding of the risks and vulnerabilities of the sector and will issue recommendations on certain aspects where necessary.

Insurance Europe commented that it is pleased that the results of the stress test confirm the strength of Europe’s insurance industry and stated that Solvency II, the regulatory framework for the insurance industry, is already a comprehensive risk-based system with conservative capital requirements.

EIOPA also published an FAQ and a factsheet on the 2018 Insurance Stress Test.


In connection with the 2020 planned assessment of the reporting and disclosure requirements under Solvency II, EIOPA is seeking input from stakeholders on areas that could be improved.  The 2020 assessment is intended to identify whether the existing reporting and disclosure requirements are fit for purpose and if they facilitate a risk-based and proportionate approach. 

EIOPA will launch a public consultation later in 2019.  In the meantime, EIOPA has identified particular areas in the disclosure and reporting process in which it is interested in receiving feedback.  The specific topics EIOPA invites stakeholders to consider can be found on the submission page. 

Submissions should be made before 21 February 2019.  Submissions made after that date but before 31 March 2019 will be considered on a best effort basis. 


EIOPA has published its seventh annual consumer trends report and accompanying press release outlining key developments in the European insurance and pensions sector. The report provides statistical analysis of all aspects of the insurance and pensions sector including trends in sales volumes, commission rates, distribution channels and complaints. While there were no significant shifts in 2017, certain trends have continued from previous years.

The increased use of technology has become more noticeable across all lines of business, but in particular, among the most common non-life insurance products such as motor insurance (e.g. 60% of which was obtained through price comparison websites in the United Kingdom). The report also notes a steady increase in the purchase of cyber-risk insurance products as concern about cyber-attacks grows among consumers.

In the life sector, there has been a continued reduction in profit participation products while there has been a 42% increase in index-linked and unit-linked insurance. This is now the largest life insurance line of business.

Complaints have raised across the non-life insurance sector but in particular, travel insurance complaints experienced an 85% growth (mostly regarding sales).


EIOPA has published an opinion addressed to national competent authorities (NCAs) to ensure the appropriate application of legal requirements and consistent supervisory practices in relation to the calculation of technical provisions and the governance of cross-border business of a long-term nature.

Long-term non-life insurance business operated on a cross-border basis is usually more uncertain than other non-life business requiring specific knowledge of local market specificities and specific actuarial skill for the calculation of the technical provisions and management of the activity. EIOPA has identified deficiencies relating to the calculation and supervisory assessment of the solvency position of undertakings carrying out such business.

The opinion sets out EIOPA’s expectations and recommendations to NCAs in the following three areas:

  • Expectations on technical provisions with a focus on the best estimate calculation;
  • Expectations on the key functions and the administrative, management or supervisory body; and
  • Recommendations on the supervisory review process and the collaboration between home and host member state NCAs.

Annexes to the opinion also contain examples of good practices for the calculation technical provisions in problematic areas such as French construction defect insurance and Italian medical malpractice insurance. Further annexes may be developed in the future to provide additional examples of technical provisions calculation and quantitative information for such business.