Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I will put a note on the record. In order to protect consumers’ interests, section 11 amends the European Union (Insurance and Reinsurance) Regulations 2015.

These amendments will provide for technical changes in order to address two issues identified by the Central Bank of Ireland and relating to the scope of an insurance temporary run-off regime for UK- and Gibraltar-authorised insurers. This arises directly as a result of Brexit. The temporary run-off regime was established to facilitate the orderly withdrawal of UK- and Gibraltar-authorised insurers from the Irish market following the departure of the UK from the EU in order to protect almost 35,000 policyholders. Those companies provided insurance policies to 35,000 policyholders but are now withdrawing from the market because of Brexit. The aim was to enable such firms to continue to service their existing portfolio of business for up to 15 years in order to ensure service continuity of those insurance contracts for existing Irish policyholders. Other EU member states also introduced similar provisions.

Section 11 provides for the following changes to the scope of the temporary run-off scheme. First, it amends the 2015 regulation to provide that UK and Gibraltar firms in the temporary run-off regime that are in the process of running off their existing insurance liabilities in the State may provide third-party reinsurance business here. This change will align the temporary run-off regime with the provisions of the 2015 regulations whereby third-country undertakings can carry on reinsurance activities in the State, provided that they satisfy certain conditions. This should also assist to preserve reinsurance capacity in the Irish market. This is to facilitate the wind-down in an orderly manner.

Section 11 further amends the 2015 regulations to enable firms in liquidation that otherwise satisfy the conditions of the temporary run-off regime but may have had their authorisation withdrawn under the law in the UK or Gibraltar prior to the UK’s departure from the EU to enter into the regime and run-off their Irish insurance portfolio in order to terminate their activity in the State. This is a separate provision to deal with insurance companies that have gone into liquidation and will not be continuing in the long term. This is necessary as the current wording of the 2015 regulations makes it a condition of entry to the temporary run-off scheme that the entity was, immediately before the relevant date, authorised as an insurance undertaking under the law in the UK or Gibraltar. However, some firms in liquidation may have had their authorisation withdrawn before 2021 on the opening of the winding-up of the proceedings and, therefore, would not otherwise be able to enter the temporary run-off scheme. It is important to note that these changes to the 2015 regulations merely reflect what was the original policy intent behind the temporary run-off scheme. The amendments will not give UK- or Gibraltar-based insurance firms any competitive advantage over firms based in Ireland or elsewhere in the EU or EEA. As it is an issue relating to dates, we were concerned that these firms would be captured. It may be the case that some companies that were in liquidation and had their authorisation withdrawn before 1 January may not otherwise be able to fully avail of this temporary run-off scheme. There is no change in policy; it is just a clarification of an issue relating to dates.