Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance if he will provide details of the Central Bank of Ireland powers to suspend a person from acting as director of an insurance company; the possible duration of such a suspension; the circumstances under which the Central Bank may lift the suspension before its stated expiration date. [56278/12]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy should note that the Central Bank cannot comment on individual cases as they are precluded under section 33AK of the Central Bank Act 1942, from disclosing information on individual financial service providers. The Central Bank has informed me however that there is a Fitness and Probity Regime which applies to regulated financial service providers and this would include insurance companies. The regime prescribes a continuing obligation on financial service providers in relation to fitness and probity due diligence.

In this regard, Section 21 (1) of the Central Bank Act 2010 provides that a regulated financial service provider shall not permit a person to perform a controlled function unless:

a) The regulated financial service provider is satisfied on reasonable grounds that the person complies with the Fitness and Probity Standards 2011 (“Standards”), and

b) The person has agreed to abide by the Standards.

A person to whom the Standards apply shall comply with them at all times. Specifically a person is required to be competent and capable, honest, ethical and act with integrity and be financially sound.

If the Bank suspects that a person performing a controlled function no longer meets the appropriate fitness and probity requirements, it may investigate the matter and has the power to issue a suspension notice where it considers it necessary to prevent serious damage to the financial system or to protect consumers. The suspension notice has the effect of suspending a person from performing functions covered by the notice. A suspension notice can take effect for up to 3 months or longer with the consent of the High Court.

On completion of the investigation, the Bank must prepare a report for consideration by the Commission and Governor of the Central Bank. It may issue a prohibition notice forbidding the person from carrying out the controlled function for a specified period or indefinitely.

The Prohibition Notice ceases to have effect 2 months after first service (or such shorter period as specified) unless an application has been made to the High Court for confirmation of the Notice. Where the High Court confirms the Prohibition Notice, it takes effect as an order of the High Court and may be enforced accordingly.

Procedures governing the conduct of investigations were published in February 2012, entitled: Central Bank Reform Act 2010 (procedures governing the conduct of investigations) Regulations 2012. They are available on the fitness and probity section of www.centralbank.ie