In a press release published on 25 October 2012, the Central Bank announced that it has entered into settlement agreements with two retail intermediaries for their failure to hold professional indemnity insurance (“PII”) for a period of time in contravention of the European Communities (Insurance Mediation) Regulations 2005 (as amended). The Central Bank noted that the failures had been discovered through themed inspections carried out by its Consumer Protection Directorate. The Central Bank stated that each of the retail intermediaries has been reprimanded and a monetary penalty has been imposed.
The Central Bank also emphasised the importance of holding PII, stating that it is a key prudential and consumer protection tool which provides an additional resource from which a firm can pay justified claims by consumers relating to professional negligence. The Central Bank highlighted that it expects retail intermediaries to comply with the requirement to hold PII and where retail intermediaries fail to do so, they can expect vigorous investigation to follow. Indeed, the Central Bank stated that a number of other cases relating to PII arising from themed inspections are currently under investigation.
Details of the settlement agreements can be found here.