Written answers

Tuesday, 11 April 2017

Department of Finance

Insurance Industry Regulation

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
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149. To ask the Minister for Finance the requirements for operating an insurance company here; if there is a need to conform with a set of regulations laid down by the relevant Department; the penalties for not complying; if he has powers to invoke such and force a company to offer a certain type of insurance; and if he will make a statement on the matter. [18055/17]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As Minister for Finance, I have responsibility for the development of the legal framework governing financial regulation in Ireland, including the regulatory environment for life and non-life insurance.  This legal and regulatory framework for the provision of life insurance, non-life insurance and reinsurance in the European Economic Area (EEA), and the supervision of that activity, is prescribed by EU Directives.  Insurance companies that operate in this jurisdiction must therefore operate under those requirements.

I have no role in day to day supervision of the insurance industry, as this is the responsibility of the Central Bank of Ireland.  In that regard, the Central Bank of Ireland has two specific mandates as regards insurance supervision.  Firstly, it is responsible for the prudential supervision of insurance companies it has authorised by seeking to ensure that such firms remain solvent.  It does this by continuously monitoring the solvency requirements of insurers which are underpinned by the European Union (Insurance and Reinsurance) Regulations 2015. These regulations transpose the EU Directive "Solvency II"  into Irish legislation. Secondly, the Central Bank of Ireland is responsible for the supervision of conduct of business in Ireland, also referred to as consumer protection. All insurance undertakings operating in Ireland, whether authorised by the Central Bank of Ireland or a competent authority of another EU state, are subject to conduct of business supervision by the Central Bank of Ireland. 

The Central Bank of Ireland operates an assertive risk based approach to supervision which is supported by a credible threat of enforcement. Its enforcement strategy is aimed at promoting principled and ethical behaviour in regulated entities and those that work in such entities.  The relevant enforcement tools including penalties for non-compliance are set out on the Central Bank of Ireland's website: www.centralbank.ie/regulation/how-we-regulate/enforcement.

Finally, with regard to your last point, neither I nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.  The provision of insurance cover and the price at which it is offered is therefore a commercial matter for insurance companies.

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