Tracker, Financial Services Regulation & Compliance - Insurance
Department of Finance publishes report on motor insurance
On 10 January 2017, the Department of Finance (DOF) published its "Cost of Insurance" Working Group's report on motor insurance. The Working Group was established to examine drivers of increasing insurance costs and to recommend measures to address this. Recommendations include (a) creation of a national claims database by mid-2018, (b) establishment of a Personal Injuries Commission to examine factors relevant to the cost of personal injuries, (c) improvements to the book of quantum and (d) measures to tackle fraud and uninsured driving. The Report includes a detailed action plan identifying responsible bodies and timelines for delivery for each recommendation. In a press release on 10 January 2017, Insurance Ireland welcomed publication of the Report but emphasised the need to prioritise actions on the cost of claims. In this regard, it noted that gross incurred claims had increased by a total of 44% between 2012 and 2015.
New legislative proposals pave way for periodic payment orders
On 10 January 2017, the Civil Liability (Amendment) Bill 2017 was introduced to the Oireachtas (Irish Parliament) on behalf of the Minister for Justice and Equality. If enacted, the Bill will permit the Courts to make periodic payment orders (PPOs) as an alternative to lump sum awards in cases of catastrophic injury. The Bill sets out the factors to be considered by a Court in determining whether to make a PPO (and provides that a PPO may only be made where the Court is satisfied that continuity of payments would be reasonably secure). The Bill also provides for annual adjustment of periodic payments by reference to the Harmonised Index of Consumer Prices.
Supreme Court - investment via an insurance bond not an insurance contract
On 21 December 2016, the Supreme Court held that an investment (which the appellant contended was a contract of insurance attracting the duty of utmost good faith), was not, in substance, a contract of insurance and that no duty of disclosure to the appellant arose. A copy of our briefing on the case is available here.
CBI speech on 'culture' at the Association of Compliance Officers
On 18 January 2017, the Central Bank of Ireland's (CBI) Director of Insurance Supervision gave a speech to the Association of Compliance Officers in Ireland on the role of culture in insurance supervision. Amongst other matters, this outlined what the CBI regards as good practices. These include (a) championing culture from the top, (b) driving effective behaviours through vigilance and reinforcement and (c) clear roles, responsibilities and accountabilities. The CBI also confirmed an upcoming thematic review of internal audit functions during 2017.
EU-US Insurance Project discusses cyber security
On 17 January 2017, the European Insurance and Occupational Pensions Authority (EIOPA) issued a press release highlighting that the EU-US Insurance Project had recently convened a number of experts from the EU and the US Department of the Treasury to discuss cyber security efforts and improve transatlantic cooperation in this field. Common priorities identified included monitoring of the emerging risk, sharing best risk management practices and engaging with insurance sector stakeholders. The Project is to conduct further cyber security sessions during 2017.
EU and US bilateral (re)insurance agreement concluded
On 13 January 2017, the EU and US published a joint statement announcing the successful conclusion of a bilateral agreement on (re)insurance. The agreement covers prudential oversight in relation to (a) reinsurance, (b) group supervision and (c) the exchange of information between supervisors. According to the joint statement, the agreement aims to ensure robust consumer protection in the EU and US as well as enhanced regulatory certainty for (re)insurers operating in both jurisdictions. EIOPA and Insurance Europe have issued press releases welcoming the conclusion of the agreement.
EIOPA and Bermuda Monetary Authority execute Memorandum of Understanding
On 17 January 2017, EIOPA confirmed that it has signed a Memorandum of Understanding (MoU) with the Bermuda Monetary Authority (the BMA). The MoU aims to facilitate further cooperation between EIOPA and the BMA to optimise the supervision of European and Bermudan (re)insurance groups. The MOU provides a framework for the regular exchange of supervisory information and other forms of supervisory cooperation (e.g. through regular high level meetings and joint training initiatives).
EIOPA Chairman delivers forward looking speech focussing on insurance in the digital era
On 26 January 2017, EIOPA published a recent speech delivered by its Chairman on the future of the insurance industry (with a particular emphasis on challenges and opportunities in the digital era). EIOPA will organise a series of roundtables dedicated to "insurtech" this year to evaluate the impact of digitisation on the insurance sector and from a supervisory perspective. The speech also noted EIOPA's key priorities over the coming years as including enhancing supervisory convergence, securing financial stability and enhancing consumer protection in a challenging economic environment.
Concern regarding proposed European Services e-card
On 11 January 2017, Insurance Europe (IE) issued a press statement reiterating its concerns regarding the proposed European Services e-card. The e-card is one of a range of measures proposed by the European Commission targeting barriers to the provision of cross-border services in key sectors such as construction and business services. IE does not share the European Commission's view that insurance is a barrier and is concerned that some of the proposed measures (such as a standardised pan-European claims history statement) will result in an additional and unnecessary burden on insurers with limited benefit for the sectors they are intended to assist.
For further information please contact a member of the Financial Regulation team.
Date published: 07 Feb 2017