On 7 February, the Central Bank published responses received by it to its 2016 Discussion Paper on the Payment of Commission to Intermediaries. The Central Bank stated that their examination of this topic arises against the background of an increasing focus internationally on how remuneration structures influence culture within firms and their treatment of customers. In the January edition of the Arthur Cox Insurance Regulatory Update, we reported on the speech given by the Director of Insurance Supervision at the Central Bank, Sylvia Cronin, on the role of culture in insurance supervision.
Based on its analysis of this area, the Central Bank is proposing the creation of additional measures to strengthen protections for consumers under the following headings:
- the acceptance and retention of commissions by intermediariesdescribing 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.
The Central Bank also stated in its press release that the responses to the Discussion Paper will inform the technical advice that it will give to the Government on the legislative framework and implementation of the Insurance Distribution Directive.
The Central Bank's press release can be accessed here.
The responses to the Discussion paper are available here.
The Discussion Paper is accessible here.