Department of Finance publishes Feedback Statement on transposition of the IDD
On 12 March 2018, the Department of Finance published a Feedback Statement to its public consultation on transposition of the Insurance Distribution Directive (Directive 2016/97/EU) (IDD). This provides an overview of (a) responses received to the consultation, and (b) decisions taken by the Minister for Finance with regard to national discretions in the IDD.
Among other matters, the Statement confirms the Minister's decision to prohibit acceptance of fees, commissions or other benefits in relation to the provision of independent advice for insurance-based investment products. The Statement also refers to the ongoing work of the Central Bank of Ireland (CBI) in the area of commission payments and notes that other decisions in the area of commission will be reviewed when that work is complete. According to the Statement, the Statutory Instrument transposing the IDD is expected to be published well in advance of the 1 July transposition deadline.
Central Bank publishes Insurance Quarterly
The CBI has published the March edition of its Insurance Quarterly publication. The publication covers a range of topics, including:
- annual Solvency II reporting
- CBI expectations for submission of the Solvency and Financial Condition Report (SFCR)
- feedback from the CBI's thematic onsite inspection of outsourcing
- governance in risk culture (the second in a series of CBI articles on risk culture)
Head of Insurance Supervision addresses Insurance Ireland CRO Forum
The CBI recently published a speech delivered by Marie Louise Delahunty, Head of Insurance Supervision, to the Insurance Ireland - Milliman Chief Risk Officer (CRO) Forum. Among other matters, Ms Delahunty discussed key risk areas in the insurance industry, including outsourcing, geopolitical risks, Brexit, IT Risks and Insurtech/Fintech. Other topics covered included CRO communication with the Board, building resilient teams and team diversity, and governance.
Directive delaying the IDD adopted
On 9 March 2018, the Council of the EU adopted a directive (Directive (EU) 2018/411) postponing the transposition date of the IDD to 1 July 2018 and the application date to 1 October 2018. The amending directive was published in the Official Journal of the EU on 19 March 2018 and applies retrospectively from 23 February 2018 (the original application date of the IDD).
EIOPA publishes second paper on systemic risk and macroprudential policy in the insurance sector
On 21 March 2018, European Insurance and Occupational Pensions Authority (EIOPA) published its second in a series of papers concerning systemic risk and macroprudential policy in the insurance sector. EIOPA's second paper identifies, classifies and assesses the tools and measures existing under Solvency II, such as the volatility and matching adjustments, which could mitigate sources of systemic risk.
EU Commission public hearing on reforms to Solvency II
On 27 March 2018, the EU Commissioner for Financial Stability, Financial Services and Capital Markets Union, Valdis Dombrovskis, delivered the keynote speech at the public hearing on reforms to Solvency II, focussing on capital requirements in Commission Delegated Regulation (EU) 2015/35. The Commissioner outlined three targeted areas for improvement which were helping insurers invest in growth creation, improving proportionality and removing inconsistencies in the Solvency II implementing rules.
Other matters covered included the strategy to complete the Capital Markets Union by 2019, plans to amend Solvency II capital requirements to take account of the new 'Simple, Transparent and Standardised' securitisation rules, and the Commission's Action Plan for Sustainable Finance.
EIOPA Chairman Gabriel Bernardino also delivered a speech at the hearing outlining EIOPAs advice on the review and noting its view that proportionality should be achieved by use of simplified methodologies, with all undertakings being subject to the same quantitative solvency requirements. On the same date, Insurance Europe (IE) published an insight briefing outlining key areas it believes need to be addressed in reviewing Solvency II, including cost of capital in the risk margin and reduction of capital requirements for long-term investment in equity.
EIOPA publishes letter to EU Commission on supervisory reporting requirements consultation
On 6 March 2018, EIOPA published a letter from its Chair, Gabriel Bernardino, to the EU Commission relating to the Commission's December 2017 consultation on supervisory reporting in financial services.
Among other matters, Mr Bernardino highlights the importance of supervisors receiving meaningful data in terms of granularity, coverage, frequency and within proper timelines in order to identify risks facing the industry. He also recommends exploring the potential benefit of additional efforts in data governance and standardisation throughout the financial sector. Mr Bernardino also noted EIOPA is currently preparing its review of the implementing technical standards on Solvency II supervisory reporting.
EIOPA publishes consultation on corrections and amendments to reporting and disclosure implementing technical standards
On 28 March 2018, EIOPA published a consultation on corrections and amendments to the implementing technical standards on reporting and disclosure. EIOPA is seeking views on the proposed corrections and amendments, which it notes include measures to improve understanding of current reporting and disclosure requirements and the quality of the information reported and disclosed, by 11 May 2018.
EIOPA Head of Consumer Protection at the European Consumer Protection Conference
On 22 March 2018, EIOPA's Head of Consumer Protection, Katja Wuertz, delivered a speech on EIOPA's work in the area of conduct of business from a regulatory and supervisory perspective. Among other matters, Ms Wuertz highlighted EIOPA's focus on convergence (for example, through use of Q&A's and exchanges of views of national competent authorities (NCAs)) in the interpretation and implementation of Solvency II, IDD and the Regulation on Packaged Retail Insurance-Based Investment Products so as to avoid divergences in consumer protection standards.
The speech also outlined EIOPA's concerns on conduct risk and that NCAs should make use of the full range of supervisory tools for conduct purposes, including conduct risk assessments, thematic reviews and deep dives, mystery shopping, and onsite conduct supervision. Ms Wuertz also briefly discussed the topics of Insurtech and Brexit.
Insurance Europe publishes updated paper on Consequences of Brexit on Existing Contracts
On 5 March 2018, IE published an updated version of its paper on the consequences of Brexit on existing contracts. The Paper, originally published in September, recommends a post-Brexit grandfathering arrangement for insurance contracts issued by insurers under the EEA passporting regime prior to Brexit and identifies certain cases where it believes grandfathering to be the only solution, including profit sharing (contracts relating to assets and liabilities that cannot be separated into UK and EU components) and pan-European contracts.
Insurance Europe publishes template for data breach notifications under GDPR
On 19 March 2018, IE published a data breach notification template that it suggests could be used as a possible means to meet data breach notification obligations under the new General Data Protection Regulation (GDPR), which will apply from 25 May 2018. The GDPR will require notification of personal data breaches to be submitted to the national supervisory authority, without undue delay and, where feasible, no later than 72 hours after becoming aware of a breach.
EU Council approves EU/US bilateral (re)insurance agreement
On 20 March 2018, the Council of the EU adopted a decision approving the EU/US bilateral (re)insurance agreement. This follows the 1 March 2018 adoption by the EU Parliament of a legislative resolution giving its consent to the conclusion of the agreement. The Agreement was signed on 22 September 2017 and has had provisional application since 7 November 2017.