Terence Flanagan (Dublin North East, Independent)
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232. To ask the Minister for Finance if he will address a matter (details supplied) regarding insurance providers; and if he will make a statement on the matter. [7078/15]

Michael Noonan (Limerick City, Fine Gael)
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The current legal and regulatory framework for the provision of insurance in the European Economic Area, and the supervision of that activity, is prescribed by European Union Law in the Life and Non-Life Insurance Directives. Following negotiations that were completed at European level in November 2013, a new regime known as Solvency II will commence on 1 January 2016.  This will strengthen the EU regulatory framework for insurance providers. The Solvency II EU Directive sets out new stronger EU-wide requirements on capital adequacy and risk management for insurers with the key aim of increasing policyholder protection.  The most essential features of the Solvency II Directive are the introduction of an economic/risk based approach to the measurement of assets and liabilities and a much greater focus on qualitative issues such as governance and the role of the supervisor.  Capital requirements will be determined by an evaluation of a company's level of risk using a consistent set of measurement principles, resulting in an appropriate level of capital for solvency purposes. This contrasts with the use of a simple set of factors for determining capital under Solvency I.  The new regime will also ensure greater cooperation between Member State national supervisors. 

The day to day responsibility for the supervision of the solvency of Irish authorised financial institutions is a matter for the Central Bank of Ireland which is statutorily independent in the exercise of its regulatory and supervisory functions. Under EU passporting rules, any insurer which has been authorised in another EU Member State may trade in Ireland on a freedom of services basis. In these cases, the financial position of the insurer is supervised by its home regulator rather than by the Central Bank of Ireland. However, the Central Bank is responsible for supervising the insurance provider in relation to conduct of business rules i.e. requirements under the consumer protection code.  Furthermore, EEA insurance regulators are members of the European Insurance and Occupational Pensions Authority and are required to comply with the general protocol relating to the sharing of information between the insurance supervisory authorities of the member states of the European Union.

My Department and the Central Bank will in due course be reviewing the overall framework and will report to me on what lessons can be learned and how the framework can be strengthened.