Insurance Regulation

Types of Insurer There are separate schemes of authorisation and regulation for life and non-life insurance.  The differences in the risks and nature of the business have justified separate legislation. Both are regulated by the Central Bank and contain many common features. In each case, Irish regulations made under the European Communities Act implement the EU Directives. It is a feature of both schemes of regulation that entities are authorised for particular classes of insurance business, set out in their authorisation.  The legislation divides various insurable risks into classes and an insurer is accordingly regulated, for the relevant class or classes. A captive insurance company is generally established as an independent entity, to insure part or all of its group risks. The same broad regulatory regime applies. Reinsurance business is regulated under EU legislation.  Ann authorisation is required as a reinsurer. The authorisation period is broadly similar to that in respect of insurance companies.… Read the rest

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Regulation Insurance companies, brokers and agents operate under the same broad scheme of regulation, as financial advisors and other financial product sellers.  There are European-wide standards applying.  The Central Bank, now the Central Bank is the insurance industry regulator. See the sections on financial services regulation. Insurance companies must be authorised by the Central Bank and are subject to ongoing supervision by it. There are distinct regulations and requirements for life assurance and non-life assurance There are EU-wide standards in relation to capitalisation. companies.  They must hold at least prescribed levels of minimum capital and reserves, in order to meet claims in the business. Insurance companies must meet minimum solvency requirements. Central Bank The Central Bank is the industry regulator and policeman.  It has significant powers to investigate compliance and impose sanctions for breaches of obligations. They can undertake enquiries and impose sanctions. The powers extend beyond breaches of legal requirements, to cover of standards of fairness, reasonableness as provided by codes of conduct, in particular, the Consumer Protection Code.… Read the rest

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Monies Received The Consumer Protection Code applies to insurance in common with other consumer financial services.  Insurance brokers are subject to much the same regulation and requirements as other financial and investment intermediaries. An insurance intermediary must lodge money it receives in respect of a premium in a segregated client premium account.  It must operate separate accounts for life and non-life business.  It must ensure that all payments from a client premium account state that the payment emanated from it. The client premium account must never be overdrawn.  The debits and credits permissible on the account are set out in the Code.  They are limited to payments in the context of intermediation between client and insurer. An insurance intermediary must undertake a reconciliation of amounts due to regulated entities, with the balance on each client’s premium account which it operates. Quotation A regulated person who provides an insurance quotation to a consumer must include the following information in the quotation, assuming that all details provided by the consumer are correct and do not change; the monetary amount of the quotation; the time for which it is valid; the legal name of the underwriter; any warranties and endorsements that apply to the policy; details of any discounts or loading that have been applied in the generation of the quotation.… Read the rest

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