In advance of the implementation of the EU Solvency II Directive, the Central Bank of Ireland's Fitness and Probity Regime(1) was reviewed to determine its compatibility with the Solvency II regime. A number of amendments are set to be made to the regime for all (re)insurance undertakings, including changes to:
- key function holders;
- outsourcing key functions;
- the head of the actuarial function; and
- the removal of the chief actuary and signing actuary.
Key function holders
Since January 1 2016, under Solvency II, all undertakings must have the following key functions of the System of Governance in place:
- internal audit;
- risk management; and
- actuarial functions.
Undertakings without these functions in place had to establish them, designate an individual to be responsible for each and submit an individual questionnaire to the Central Bank for approval before January 1 2016.
Outsourcing key functions
Where key functions are outsourced, the Central Bank requires that the undertaking designate a pre-approval controlled functions (PCFs) holder within the undertaking with overall responsibility for the outsourced arrangement. Undertakings that outsource key functions must notify the Central Bank of the PCF holder with responsibility for the key functions.
Head of actuarial function
The Domestic Actuarial Regime introduces the requirement for all undertakings to appoint a head of actuarial function. This role incorporates responsibility for the actuarial function tasks outlined in Article 48 of the Solvency II Directive, along with added responsibilities outlined in the regime.
Removal of chief actuary and signing actuary
The chief actuary (PCF20) and signing actuary (PCF44) will be removed as PCFs from the Fitness and Probity Regime. The amendments do not affect the role or responsibilities held by these individuals, but simply remove the roles from the pre-approval provisions of the regime.
For further information on this topic please contact Darren Maher at Matheson by telephone (+353 1 232 2000) or email (email@example.com). The Matheson website can be accessed at www.matheson.com.
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