European Union: Insurance Regulatory Update – August 2017

Last Updated: 11 September 2017
Article by Elizabeth Bothwell and Jennifer McCarthy


On 25 August 2017, the European Union (Insurance and Reinsurance) (Amendment) Regulations 2017 [S.I. No. 384 of 2017] (the Regulations) were published. The Regulations make certain amendments to the European Union (Insurance and Reinsurance) Regulations 2015 [S.I. No. 485 of 2015] (the 2015 Regulations) and the Insurance Act 1989 in order to more accurately reflect the Solvency II Directive.

The main provisions of the Regulations are as follows:

  • Removing third country reinsurance providers from the scope of the 2015 Regulations, so long as they only carry out reinsurance activities in Ireland;
  • Reinsurers with a head office located in Ireland who wish to transfer their portfolio to another undertaking will now require approval from the Central Bank;
  • The Regulations amend the conditions of authorisation for third-country insurance undertakings operating a branch in Ireland under Regulation 176 of the 2015 Regulations. The amendments grant the Central Bank the power to impose, vary and revoke the conditions of authorisation with respect to the conduct of insurance business by the third country branch to ensure that the branch meets its responsibilities and obligations under the 2015 Regulations; and
  • Insurance holding companies or mixed financial holding companies will have to notify the Central Bank under a new notification regime where there is a change in the identity of the persons effectively running the insurance holding company or mixed financial holding company under Regulation 261 of the 2015 Regulations. The notification should include all information required by the Central Bank to assess whether the person appointed are fit and proper to perform their duties, and must be made within 5 working days of their appointment. It is no longer an offence for an insurance holding company or mixed financial holding company to breach its obligations under the fit and proper notification regime without reasonable cause. However, such appointment, which has not been notified will be void.
  • The Regulation also dis-applies the provisions of Section 14 and 15 of the Insurance Act 1989 to any insurer to which the 2015 Regulations apply, other than (re)insurers caught by Regulation 11 of the 2015
  • Regulations. Section 14 deals with the separation of assets and liabilities when accounting for life assurance business and Section 15 provides for the manner in which assets of undertakings transacting life assurance business are to be applied.

The Regulations are effective immediately.

The Regulations are here.


The Central Bank and Financial Services Authority of Ireland (Amendment) Act 2017 (the

Amendment Act) have come into force. The amendments introduced by the Amendment Act apply to life insurance products and to long term financial service products that last for five years and one month or more. The Amendment Act extends the six year time limits in respect of long term financial services products to six years from the date of the conduct complained of, or three years from the date the complainant became aware of the conduct, or such longer period as the FSO may allow.

Under the Amendment Act the FSO is obliged to, where possible, resolve complaints by way of mediation. The Amendment Act also extends the time limit for appealing a finding of the FSO to the High Court from 21 to 35 days after the date of notification of the finding.

The Financial Services and Pensions Ombudsman Act 2017 (the FSPO Act) was also enacted last month but has not yet come into force. Once commenced, the FSPO Act will amalgamate the office of the FSO and the Pensions Ombudsman and will, in effect, replace the Amendment Act.

The Amendment Act 2017 is here. The FSPO Act is here.


On 14 August, the Data Protection Commissioner published guidance on the appropriate level of qualification and expert knowledge that a DPO is expected to have in order to comply with Article 37.5 of the GDPR.

The GDPR does not prescribe the professional qualities or the training that a DPO is expected to have undergone to be qualified for the role. However, according to the Data

Protection Commissioner relevant skills and expertise include: expertise in national and european data protection laws and practices including an in-depth understanding of the GDPR; understanding of the processing operations carried out; understanding of information technologies and data security; knowledge of the business sector and the organisation; and ability to promote a data protection culture within the organisation. While many insurers already have DPO's in place, insurers should review the current job specifications of their organisation's DPO to consider whether they are appropriate in light of the Data Protection Commissioners guidance and the minimum duties of a DPO contained in the GDPR.

In assessing the level of qualification and training required for their DPO, the Data Protection Commissioner encourages organisations to be aware of the various training options that may be pursued. It recommends that the following factors be taken into account when selecting the appropriate DPO training programme: the content and means of the training and assessment; whether training leading to certification is required; the standing of the accrediting body; and whether the training and certification is recognised internationally.

The Data Protection Commissioner's guidance is here.


On 8 August, the Central Bank published its performance report on regulatory service standards for the first half of 2017 (the Report). The Report contains information on the Central Bank's performance for the first half of 2017 in meeting the timeframe deadlines it has set for the authorisation process.

96% of the Service Standards covering most sectors were met or exceeded by the Central Bank during the period. Six complete applications for (re)insurance undertakings were processed during the period. Six applications were returned for being incomplete, 83% of these applications were returned within a 2 week period.

In all cases the Central Bank's target Fitness and Probity Standards were met. The Central Bank also noted that the PCF applications relating to the authorisation process take precedent over other PCF applications under the Central Bank's Fitness and Probity regime.

The Central Bank's press release is here.

The Central Bank's report is here.



The European Commission has launched a public consultation under its Regulatory Fitness and Performance programme (REFIT) to review the compulsory motor insurance regime put in place by Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability (the Motor Insurance Directive).

The Motor Insurance Directive ensures the protection of road traffic victims across the EU by allowing insurance for third party liability in one EU member state to apply across the EU without the need for any further administrative formalities.

The REFIT evaluation will focus mainly on the following topics:

  • Portability of claims history statements;
  • Possible guarantees towards victims in cases of insurers' insolvency;
  • Minimum cover amounts;
  • Insurance checks;
  • Terminology;
  • Scope of the Motor Insurance Directive;
  • Autonomous cars; and
  • Transfer of vehicles.

The consultation follows the publication of an Inception Impact Assessment on the REFIT evaluation of the Motor Insurance Directive on 24 July 2017.

The purpose of the consultation is to gather input from all relevant stakeholders. As such, the Commission's evaluation questionnaire is split into two sections, one for consumer responses and the other for companies and institutions involved in the industry.

In response to the launch of the Commissions REFIT evaluation, Insurance Europe and the Council of Bureaux have issued a statement emphasising the benefits of the current system. The statement also calls into question the merits and feasibility of market standardisation across the EU regarding claims history statements and focuses on the particular disadvantages associated with an EU-wide guarantee scheme for insolvent insurers.

The consultation closes on 20 October 2017 and appropriate responses will feed into the Commission's legislative proposal to amend the Motor Insurance Directive.

The Inception Impact Assessment is here.

The Commission's evaluation questionnaires are here.

The statement from Insurance Europe and the Council of Bureaux is here.


On 18 August, the ESAs published a further Q&A document in respect of the regulatory technical standards (RTS) laid down in Commission Delegated Regulation 2017/653. The Q&A document consolidates the questions and answers published in the first Q&A document published on 4 July and addresses additional questions in relation to market and credit risk assessment, the summary risk indicator, performance scenarios, derivatives and methodology for calculating cost.

The ESAs have also published an explanatory diagram summarising the methodology and the processes to be used to determine the relevant risk indicators, performance scenarios and costs associated with a PRIIP. The Q&A follows Insurance Europe's call for level 3 clarification of the PRIIPs provisions.

The ESAs' Q&A documents and

explanatory diagrams are here.

INSURANCE EUROPE PUBLISHES POSITION ON PRIIPs REGULATORY TECHNICAL STANDARDS (RTS) Insurance Europe has called for greater clarity regarding the implementation of the RTS for the packed retail investment and insurance products (PRIIPs) regulation as set out in Delegated Regulation 2017/653. In its recently published position paper, it lists several technical issues in the application of the RTS that require further explanation in the level 3 guidance. However, Insurance Europe feels the next round of Q&A produced by the ESAs should clarify a number of specific key points, in order to give legal certainty to the industry to comply with PRIIPs. Those are:

  • Transaction Costs – the cost methodology in the RTS is too burdensome for insurers whose transaction costs are usually low due to their 'buy and hold' strategy and whose portfolio of assets are more diversified than the portfolio of a regular funds. Insurance Europe posits that a proportional method that allows a quantification of transaction costs per asset class as a whole would be preferable. Also, the current cost methodology is unsuited to insurance products, because for some assets, historical data is not available and for alternative investments the RTS does not provide a methodology at all;
  • Specific Information for multi-option products (MOPs) – the information contained in the generic key information document (KID) should cover the overall product, whereas, Insurance Europe feel the information and indications
  • for the underlying option should relate to that option only and not be aggregated to include information about the overall PRIIP. The current drafting of the RTS is not clear on this point;
  • Recommended holding periods ("RHP") for MOPs within certain MOPs the underlying investment option is meant to be held for the entire RHP. Insurance Europe recommends building in flexibility to allow holding periods of underlying options in the specific information KID to be adjusted to the holding period of the overall MOP, or for certain products to use different holding periods; and
  • Treatment of Annuities – it needs to be clarified how the RTS will apply to annuities that fall within the scope of the PRIIPs regulation.

Insurance Europe's position paper is here .


On 15 August 2017, European Commission published a corrigendum to Commission Delegated Regulation 2017/653 on PRIIPs. The corrigendum amends and substitutes Table 1 'costs over

time' at Annex VII, to make it clear that total costs are not required to be presented as a percentage.

The corrigendum is here.


The European Commission has published an Implementing Regulation (EU) 2017/1469) setting out a standardised presentation format for the insurance product information document (IPID) under the Insurance Distribution Directive (EU) 2016/297).

The aim of the standardised IPID is to provide consumers with product information that is easy to read, understand and compare. The Regulation prescribes the format of the IPID and includes specific provisions relating to the manner in which the following are presented. The name and company logo of the manufacturer and the requirement to state that complete pre-contractual and contractual information about the product is provided elsewhere. There are also specific rules regarding: length of the IPID, the information required to be included under the prescribed headings, the presentation and order of content, the use of plain language and the use of icons.

The Regulation is based on the draft implementing technical standards submitted by EIOPA, who have conducted consumer testing, consulted national authorities, conducted open public consultation and have also requested the opinion of the Insurance and Reinsurance Stakeholder Group.

The implementing regulation will enter into force on 1 September 2017.

A link to the implementing regulation is here.


On 21 August, Insurance Europe published their response to the European Commission's call for evidence on how collective redress arrangements concerning violations of rights granted under EU law are being implemented in Member States. In June 2013, the Commission issued a recommendation (the Recommendation) for injunctive relief and compensatory collective redress schemes in Member States where EU law gives rights to natural and legal persons. The aim of the Recommendation was to provide access to justice in cases where two or more natural or legal persons claim to have suffered damage while also providing appropriate safeguards to prevent abusive litigation. Insurance Europe is of the opinion that too little time has elapsed since the Recommendation to suitably assess its implementation and determine whether or not there is the need for further legislative action. Insurance Europe acknowledges that the safeguards introduced in the Recommendation are a step in the right direction, if implemented correctly and encourages the introduction of further safeguards in relation to third party funding and supports the use of alternative dispute resolution mechanisms. Insurance Europe's response is here.


On 2 August, Commission Implementing Regulation 2017/1421 laying down information for the calculation of technical provisions and basic own funds for reporting with reference dates from 30 June until 29 September 2017 under the Solvency II Directive was published to the Official Journal. It entered into force on 6 August but applies from 30 June.

The Commission Implementing Regulation is here.


On 1 August, the International Association of Insurance Supervisors (IAIS) launched a public consultation on a draft revision of ICP 24 – Macroprudential Surveillance and Insurance Supervision.

The ICP system is made up of Insurance Core Principles that provide a globally accepted framework for the regulation and supervision of the insurance sector. The consultation is part of IAIS's current three-year cycle for reviewing its approach to systemic risk assessment, which is scheduled to finish in 2019.

Comments are due by 1 October 2017.

Comments can be submitted here.


Insurance Europe has responded to the International Association of Insurance Supervisors (IAIS) public consultation on revisions to Insurance Core Principle (ICP) 13 – Reinsurance and Other Forms of Risk Transfer.

While Insurance Europe welcomed the proposed changes as mostly positive, it asked for clarification on several points and urged the IAIS not to be overly prescriptive in certain provisions of the ICP. Insurance Europe commended the acknowledgement of geographical diversification, a key element of the reinsurance business model, in the introductory guidance, but noted that the regulatory framework must grant cedants sufficient flexibility in the implementation of its risk policy.

Insurance Europe's comments are here.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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