Supervision Process for Life, Non-Life and Reinsurance Undertakings

General

The supervision process for insurance and reinsurance undertakings not subject to Solvency II mirrors the general supervision process of the Central Bank. All Irish authorised financial service providers, whether engaged in international or domestic activities, are expected to implement best practice.

Governance

Undertakings must have systems and policies in place to mitigate risk and monitor compliance with their internal policies. The role of the Central Bank involves oversight of the quality of the institution's corporate governance, risk management and internal control systems.

Supervisory Process

Our supervisory process is carried out by way of:

  • Analysis of returns submitted to the Central Bank of Ireland
  • Risk-rating of undertakings using the PRISM framework
  • Themed inspections across the industry
  • Annual review meetings with individual undertakings
  • Regular correspondence and engagement with undertakings under our supervision

Regulatory Requirements

The Central Bank is also responsible for consumer protection issues. There are further regulatory requirements in respect of Consumer Protection, Fitness & Probity, Minimum Competency and Conduct of Business. The basic requirements of each and their application in respect of insurance undertakings are outlined below.

Fitness & Probity

A sound and effective fit and proper test is a critical component of our regulatory regime. To ensure the proper discharge of their responsibilities, it is important that persons in a Pre-Controlled Function (PCF) role have the skills to manage a (re)insurance undertaking.
“Fitness” requires that a person appointed to a PCF role has the necessary qualifications, skills and experience to perform the duties of that position. “Probity” requires that a person is honest, fair and ethical.
Before being appointed, the PCF applicant must demonstrate that he/she meets the required fit and proper standards. The “fit and proper test” involves the completion of an online Individual Questionnaire (IQ) by the applicant. For more information on the process please refer to the Fitness & Probity section of the Central Bank website.

Consumer Section - General

The supervision of conduct of business for life and non-life insurance undertakings is concerned mainly with the sales process, provision of information to consumers and complaints handling. This aspect of supervision of life and non-life insurance undertakings is carried out by the Consumer Protection Division.

Consumer Protection Code

The Consumer Protection Code is a set of general principles and detailed requirements covering many aspects of a financial services provider’s relationship with a consumer such as:

  • Providing financial products and services to consumers;
  • Giving information and advice to consumers;
  • Advertising financial products and services; and
  • Handling complaints.

Conduct of Business Supervisory Process:

The Central Bank monitors compliance with the Consumer Protection Code and other conduct of business requirements by way of:

  • Advertising monitoring
  • Consumer complaints
  • Themed inspections
  • General Inspections
  • Mystery shopping

Minimum Competency Requirements

The Minimum Competency Requirements are designed to establish minimum standards across all financial services providers from which consumers seek advice on, or seek to purchase, retail financial products. These requirements apply to the staff of life and non-life insurance companies who:

  • Provide advice to consumers on retail financial products,
  • Arrange or offer to arrange retail financial products for consumers, or
  • Undertake certain specified activities.