Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

135. To ask the Minister for Finance the number of insurance providers, intermediaries or managing general agents providing insurance to persons here operating under freedom of service that have at one time not met their solvency capital requirements under the Solvency II directive; if the attention of the Central Bank is drawn to cases in which insurance providers prudentially regulated in other EU countries have not met their solvency capital requirements; and if he will make a statement on the matter. [52747/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At the outset I would like to say that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation, and have no role in the day to day supervision of insurance companies. I have therefore consulted with the Central Bank on the matters raised by the Deputy.

The Central Bank has informed me that, as at 6 December 2018, 175 life insurance undertakings and 876 non-life insurance undertakings are notified to operate in Ireland on freedom of services basis. The Solvency II Directive, which entered into force 1 January 2016 sets out new, more comprehensive EU-wide requirements on capital adequacy and risk management for insurers with the key aim of increasing policyholder protection. All insurance undertakings across the European Union must comply with the requirements of the Directive (with certain limited exceptions). However, Solvency II does not apply to intermediaries or managing general agents who are authorised and supervised under the European Communities (Insurance Distribution) Regulations 2018, which transpose the Insurance Distribution Directive.

Where an insurer, or insurance intermediary authorised in another Member State operates in Ireland through a branch or under the freedom to provide services ("passporting"), prudential supervision is the responsibility of the supervisory authority of the Member State which authorised the insurer. However, where such an insurer or insurance intermediary offers its products to Irish consumers, it is subject to the consumer protection regulatory framework in Ireland.

In relation to the question of the number of insurers operating on a freedom of service basis who have at one time not met their solvency requirements, the Central Bank has indicated that in accordance with Section 33AK of the Central Bank Acts, it is prohibited from sharing information about individual regulatory relationships. Therefore I am not in a position to provide this information to the Deputy. However, the Central Bank has advised me that they actively engage with EIOPA and other national supervisory authorities in accordance with the Solvency II Directive.

Furthermore, in 2017, EIOPA (the pan-European authority with responsibility for oversight of the insurance industry) developed a cross-border platform of cooperation between National Supervisory Authorities. This platform provides all National Supervisory Authorities with the opportunity to discuss concerns in relation to specific undertakings, local markets and share general market developments. The Central Bank has advised me that they participate fully in the platform with other relevant supervisory authorities.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

136. To ask the Minister for Finance the member states in the EU and EEA that have insurance compensation mechanisms in place to pay claims in cases in which an insurance company fails; if those compensation mechanisms apply to claimants in other jurisdictions in which the failed company is operating under freedom of services; and if he will make a statement on the matter. [52748/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At the outset, the Deputy should note that currently there is no European harmonised framework of insurance guarantee schemes (IGSs) for the insurance sector. Member States have therefore adopted their own approach to such policyholder protection schemes, which show noticeable differences in design features, such as scope, coverage and funding. These differences in national IGSs, together with differences in insolvency laws, have led to a situation where policyholders across or even within the same Member States are not protected to the same extent in liquidation.

I understand, based on a report published from various sources including the European Insurance and Occupational Pension Authority (EIOPA) and the EU Commission, that there are, 26 IGSs (or similar schemes) established in 20 Member States: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Malta, Norway, Poland, Portugal, Romania, Spain and the United Kingdom.

IGSs do not exist in the following EEA Member States: Croatia, Cyprus, the Czech Republic, Iceland, Liechtenstein, Lithuania, Luxembourg, Netherlands, Slovakia, Slovenia and Sweden.

Based on the available information, there are eight IGSs operating on the basis of the host-country principle, eight operating on the home-country principle and eight schemes with a combination of both. The remaining two schemes are undefined.

The host-country principle applies when the domestic IGS covers policies or risks in that state only; in other words those policies in relation to risks in the state in question issued by domestically authorised insurers and those sold by insurers authorised in another member state who are ‘passporting in’ to that state under freedom of establishment (branches) or freedom of services (FoS). The Irish Insurance Compensation Fund (ICF) is a host-based scheme.

The home-country principle applies when the domestic IGS covers policies issued by domestically authorised insurers sold in that state or in other member states via branches or FoS. The home-country principle does not require incoming insurers which operate via branches or FoS (inward FoS) to participate in the IGS.

EIOPA are currently working to develop proposals for harmonisation of IGSs across the EU/EEA. Officials from my Department and the Central Bank are working closely with their European-level counterparts on the issue.

A final point for the Deputy to note is that in its review of the Motor Insurance Directive, the European Commission has proposed requiring all Member States to establish an IGS to cover the cost of insolvent motor insurers, including on a cross-border basis. We support this measure and are actively participating to ensure that the legislation is strong and in the best interests of Ireland, given the large insurance industry here and our previous experience with insolvent inward-FoS insurers.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

137. To ask the Minister for Finance the number of unrated insurance companies operating here; the number of those that are regulated here prudentially; the number regulated here under freedom of services; and if he will make a statement on the matter. [52749/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At the outset I would like to say that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation, and have no role in the day to day supervision of insurance companies. I have therefore consulted with the Central Bank on the matters raised by the Deputy.

The Central Bank has advised me that the data sought by the Deputy regarding the credit rating attached to all insurance and reinsurance firms operating in Ireland is not available to it.

It has also indicated that as at 31 December 2017, there were 1,166 life and non-life insurance firms licensed or notified to operate in Ireland as follows:

However, it should be noted that not all of these firms operate in the Irish market. The breakdown of the firms writing business in Ireland at 31 December 2017 was as follows:

The Central Bank has informed my Department that these figures have been taken from an EIOPA database.

Finally, the Deputy should note that the European Insurance and Occupational Pension Authority (EIOPA) in 2017 developed a cross-border platform of cooperation between National Competent Authorities (NCA’s) to provide all NCA’s with the opportunity to discuss concerns in relation to specific undertakings, local markets and share general market developments. The Central Bank has advised me that they participate fully in the platform with other relevant supervisory authorities.