Welcome to the FIG Top 5 at 5

On 29 April 2026, Director of Horizontal Supervision at the Central Bank of Ireland (“Central Bank”), Patricia Dunne, delivered a speech (“Speech”) at the European anti-financial crime summit

The Speech provides a high level overview of the risks and challenges regarding combatting financial crime, with a focus on the importance of firms evolving their risk management frameworks to keep pace with emerging threats and mitigating the impact on their customers.

Instability

Referencing the period of uncertainty that we are currently living through, Ms Dunne highlighted that such instability brings increased risk when it comes to combatting financial crime, noting that shifts in the rules of the global economy are presenting opportunities for criminals.

RSO

Addressing the nature, degree and speed of change and how we respond collectively, the Director highlighted that it was in that context that the Central Bank published its regulatory and supervisory outlook report (“RSO”) 2026 in February – for more information, see FIG Top 5 at 5 dated 5 March 2026.

She outlined the core themes in the RSO, highlighting the third theme of “Longer-Term Structural Forces”, which includes the Central Bank’s view regarding financial crime risks, covering insider dealing / provision of unauthorised financial services / terrorist financing / money laundering / fraud and scams.

Financial crime risks

Director Dunne highlighted that the Central Bank regulates and supervises the financial system to identify financial crime risks and to make sure that firms take appropriate action to mitigate those risks, ultimately ensuring the integrity of the financial system – one of the Central Bank’s four safeguarding outcomes.

Pointing out that financial crime can do great damage, not only directly impacting victims, but also damaging trust in the system, the Director emphasised that the speed of such impacts in increasingly supported by technology, such as, AI.

Money laundering & terrorist financing

The Director moved on to address the areas of anti-money laundering (“AML”) and terrorist financing (“TF”). Noting that the banking, payments and e-money sectors remain a priority focus for supervision, due to the fact that they are inherently high risk from a money laundering / terrorist financing (“ML/TF”) perspective, some of the matters highlighted are as follows:

• the Central Bank will continue to closely supervise the investment fund sector due to the nature and size of the sector in Ireland;
• the banking sector’s AML / CFT frameworks are generally mature and well embedded due to the efforts made over the past ten years, highlighting that there is a need to be particularly vigilant as regards the exploitation of new technologies by criminals;
• there is improvement needed by firms as regards ensuring that that AML / CFT frameworks keep pace with changes, and that they continue to be relevant for the risks faced, particularly with the emergence of new digital banking business models;
• boards and senior management in banks must be able to demonstrate an understanding of their key ML and TF risks and maintain risk management and control frameworks in line with national and European requirements, including those of AMLA;
• in the payments and e-money sector, much deeper work is required to strengthen their AML / CFT risk management and control frameworks. The Director emphasised that a key concern here is these firms’ “inadequate understanding” of ML / TF risks and the need for mitigating measures corresponding to the risks, particularly when it comes to newer, emerging firms;
• as regards the investment funds sector, it was highlighted that financial crime continues to need attention, noting that funds can be exploited for ML and TF. This is a key area of focus for the Central Bank in 2026 and it will be carrying out a thematic review of suspicious transaction reporting in the sector; and
• in the crypto sector, it was highlighted that the opaque and rapidly evolving nature of the market structures in the crypto sector can make it difficult to detect and trace ML / TF activities. The Central Bank expects firms to maintain effective AML and fraud prevention controls to mitigate financial crime risks, emphasising this as a key area of supervisory focus in 2026.

Director Dunne stated that the Central Bank will carry out targeted inspections to assess whether firms are meeting their obligations. She also highlighted the enhanced Risk Evaluation Questionnaire (“REQ”) as an important tool to help identify firm-level, sectoral and cross-sectoral risk. The Central Bank will continue with the roll out of the REQ to all sectors over 2026.

Fraud and scams

Director Dunne highlighted that, in 2024, total payment fraud reached €160m. She discussed the Central Bank’s recently published research technical paper looking at patterns and predictors of fraud incidence in Ireland, concluding that the research “shows that we must work faster and harder to combat fraud – based on a whole of system approach to improve public awareness and education, while also strengthening digital and financial system safeguards.”

The Director stated that financial crime is one of the Central Bank’s three areas of focus for consumer and investor protection, highlighting its expectation that this should also be a priority for all firms and agencies in financial services.

Ms Dunne referred to the 2025 Consumer Protection Code and its specific requirements that firms take steps take steps to protect consumers against frauds and scams and that where they occur, consumers are supported.

The Director stated that the Central Bank will be undertaking a “major cross-sectoral thematic review, focused on fraud controls in a number of sectors.” This will include an examination of firms’ treatment of customers who have been the victims of fraud.

Expectations

Director Dunne concluded by highlighting the expectations of the Central Bank across all areas of financial crime, stating that firms are expected to:

• understand their risks;
• invest in and enhance controls;
• report suspicious activity promptly and effectively;
• treat fraud victims fairly; and
• embrace technology with care, managing the risks to consumers and investors.

1. EIOPA publishes further draft technical standards under IRRD

On 24 April 2026, the European Insurance and Occupational Pensions Authority (“EIOPA”) published two final reports containing draft implementing technical standards (“ITS”) on resolution reporting under the Insurance Recovery and Resolution Directive (“IRRD”) and draft regulatory technical standards (“RTS”) on the functioning of the resolution colleges under IRRD.

EIOPA consulted on the ITS and RTS in July 2025 – for more information, see FIG Top 5 at 5 dated 24 July 2025.

The final reports are as follows:

1. Final report on ITS on procedures and a minimum set of standard forms and templates for the provision of information referred to in article 12(1) IRRD

The draft ITS set out the procedures and the minimum set of standard forms and templates that insurers should use when submitting the information required for the preparation of resolution plans to resolution authorities.

The report explains that the draft ITS aim to balance the level of information that resolution authorities need, with the reporting burden for insurers, by only asking for information that is strictly necessary and not already available elsewhere.

Feedback, on foot of the consultation, was received from eight stakeholders, with some resulting refinements, for example:

• submission deadlines were extended so as not to coincide with Solvency II reporting;
• article 1 of the ITS was amended to clarify that templates will only have to be submitted by entities “subject to resolution planning according to Article 9(2) or 10(1) of Directive (EU) 2025/1”. This was in response to feedback that the draft ITS should limit the reporting to entities in scope of pre-emptive recovery planning; and
• the draft ITS were amended, particularly annex III, to clarify that a resolution authority should first use the available data before requesting new reporting.

The Report highlights that any amendments made did not result in a change in the general approach set out in the consultation paper.

Next Steps

EIOPA has submitted the final report to the European Commission (“Commission”) for adoption. The ITS are intended to apply from 30 January 2027.

2. Final report on the proposal for RTS on functioning of the resolution college

This set of RTS set out a framework that details the operational functioning of the resolution colleges, with the report highlighting that they are structured in such a way so as to allow the authorities and members of the resolution colleges to define:

• the operational organisation of resolution colleges;
• the content of the written arrangements and procedures;
• the process for the joint decision including the planning and documentation required for the group resolution plan;
• the assessment of resolvability; and
• measures to address substantive impediments to resolvability.

Feedback, on foot of the consultation, was received from three stakeholders, with some refinements made. The report highlights that any amendments did not lead to a change in the general approach set out in the consultation but that further streamlining was thought useful, in line with simplification goals, for example, additional clarification has been provided as regards the role of the resolution colleges in harmonising resolution plans.

Next Steps

EIOPA has submitted the final report to the Commission for adoption, with the RTS set to apply from 30 January 2027.

2. EIOPA announces second coordinated mystery shopping exercise focused on online sales of non-life products

On 27 April 2026, the European Insurance and Occupational Pensions Authority (“EIOPA”) announced the launch of a second mystery shopping exercise (“Exercise”).

The Exercise, which will take place across ten member states, will be coordinated by EIOPA and will focus on the online sales of non-life insurance products.

Next Steps

The results of the Exercise are expected to be published in H1 2027, with EIOPA explaining that the findings will provide valuable input and a structured view on consumer outcomes.

1. Implementing regulation containing revised ITS on insurers’ exposures to central government under Solvency II published in OJEU

On 28 April 2026, commission implementing regulation (EU) 2026/911 of 27 April 2026 (“Regulation”), amending the implementing technical standards (“ITS”) contained in implementing regulation (EU) 2015/2011 (“2011 Regulation”), regarding the updating of the lists of regional governments and local authorities provided for in the 2011 Regulation, was published in the official journal of the European Union (“OJEU”).

The 2011 Regulation sets out the lists of regional governments and local authorities, exposures to whom are to be treated as exposures to the central government in accordance with Solvency II.

The European Insurance and Occupational Pensions Authority (“EIOPA”) published its final report containing the revised ITS in July 2025 – for more information, see FIG Top 5 at 5 dated 17 July 2025.

The Regulation sets out that the European Commission has deemed that two additional types of regional governments and local authorities from France, together with two new types of regional governments and local authorities from Latvia meet the criteria set out in article 85 of commission delegated regulation EU 2015/36, such that they should be added to the lists in the 2011 Regulation.

The Regulation also removes the regional governments of the United Kingdom, following Brexit.

Next Steps

The Regulation will enter into force on 18 May 2026, being 20 days following its publication in the OJEU.

2. IAIS publishes draft issues paper on customers receiving value from insurance products

On 28 April 2026, the International Association of Insurance Supervisors (“IAIS”) published a draft issues paper (“Paper”) on customers receiving value from insurance products. The Paper is accompanied by a document setting out the questions for public consultation.

The Paper highlights the important role played by insurance in protecting businesses and individuals, as well as contributing to economic stability. Nonetheless, it is noted that insurance products do not always provide a compelling value proposition to their customers, which can result in poor customer outcomes and the erosion of consumer trust.

The Paper aims to increase understanding of the importance of insurance products providing meaningful value to customers and set out ways in which to deliver that value.

Some of the matters covered in the Paper are as follows:

• challenges for consumers in evaluating value, for example:
  • assessing the value of insurance products is cognitively complex due to infrequent purchase decisions, emotional considerations and the intangible nature of insurance; and
  • behavioural biases and informational asymmetries can also make decision-making more challenging for consumers.
• factors that diminish value, with the Paper highlighting:
  • misalignment between consumer needs and product benefits can result in low value, particularly when products are unsuitable or include unexpected exclusions, or when complex decisions are required of the customer in selecting insurance coverage; and
  • bundled or tied sales, high commissions and conflicts of interest in distribution can inflate costs and obscure the true value of products.
• factors that enhance value, such as:
  • product design that rewards risk reduction, such as premium discounts for safer behaviours or risk mitigation measures; and
  • customer-centric claims handling, including streamlined processes and timely payouts.
• supervisory approaches to value, with the Paper outlining the differing supervisory approaches taken by 19 IAIS member jurisdictions to address low value in the insurance sector. The IAIS states that these examples reflect the diverse regulatory landscapes and market conditions across jurisdictions. Differences in approach include whether regulatory frameworks explicitly address the value offered by an insurance product and whether the delivery of value is directly overseen by an insurance supervisor.

Next Steps

Feedback on the Paper can be submitted until 28 July 2026, via this link. The IAIS will hold a public background session webinar on 12 May 2026.

3. PRA publishes consultation on funded reinsurance aimed at supporting resilience in life insurance industry

On 29 April 2026, the UK’s Prudential Regulation Authority (“PRA”) published the much awaited  consultation (“Consultation”) on funded reinsurance.

The Consultation sets out proposals that aim to address potential risks stemming from the continued growth of funded reinsurance exposures to support the writing of bulk purchase annuities business. Additionally, the proposals in the Consultation aim to support the long term resilience of the UK’s life insurance market.

The Consultation sets out the PRA’s view that the current regulatory treatment of funded reinsurance does not appropriately reflect the underlying risks and is not aligned to that of economically similar assets.

The PRA is concerned that continued growth in funded reinsurance exposures could result in a swift build up of underestimated risks, threatening insurers and policyholder protection and also the stability of the UK’s life insurance sector.

The core proposal relates to the Counterparty Default Adjustment (“CDA”). The PRA proposes to require that the CDA applied to funded reinsurance arrangements be equal to the Fundamental Spread for financial corporate bonds corresponding to the credit quality step and maturity of each funded reinsurance cashflow. For the average existing funded reinsurance transaction, firms currently hold capital worth 2–4% of the value of the underlying annuity liabilities, compared to 11–15% for similar investments; under the proposals, total valuation and capital charges would shift to approximately 10%.

Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA, stated:

“Funded reinsurance is growing rapidly and has the potential to undermine the resilience of insurers if not managed properly. Today’s proposals aim to iron out the discrepancy in the regulatory treatment for these deals, to protect pensioners and improve insurers’ incentives to invest directly in the UK economy.”

The proposals would not apply to business already executed or completing shortly, but would apply to any business from 1 October 2026 onwards.

Next Steps

The Consultation is open for feedback until 31 July 2026.

1. Commission consults on delegated act on prudential framework for banks’ market risk under CRR

On 22 April 2026, the European Commission (“Commission”) launched a consultation (“Consultation”) on a draft delegated act (“Delegated Act”), amending the capital requirements regulation (“CRR”), as regards temporary targeted operational relief measures and targeted multipliers for the calculation of an institutions’ own funds requirements for market risk.

The publication of the Delegated Act comes on foot of the Commission’s November 2025 consultation on the application of the market risk prudential framework in the context of the Basel III standards, also known as the FRTB – for more information, see FIG Top 5 at 5 dated 13 November 2025.

The Delegated Act, which is available to download via this webpage, proposes targeted amendments to the fundamental review of the trading book (“FRTB”) rules which are set to become applicable from 1 January 2027. The proposed amendments address both the alternative internal model approach and the standardised approaches. Additionally, the Delegated Act introduces an overall multiplier to the market risk own funds requirements.

The Delegated Act will insert new articles into the CRR, namely, articles 495i to 495v, some of the areas addressed by those new articles are as follows:

• transitional provisions as regards the profit and loss attribution test under the alternative internal model approach for market risk;
• transitional operational relief measure on own funds requirements for non-modellable risk factors;
• transitional provisions on data requirements for the assessment of modellability of new issuances;
• transitional provisions on own funds requirements under the internal default risk model;
• transitional provisions on the phase-in of the own funds requirements under the alternative standardised approach and simplified standardised approach; and
• transitional provisions on the derogation for small trading book business institutions.

The amendments aim to support a level playing field for EU banks, that are internationally active, by offsetting the negative capital impact of the FRTB for a period of three years. The Commission has also stated that the Delegated Act aligns with the goals of the savings and investment union communication, which highlights that strong competition between banks in their trading activities makes maintaining a level playing field for internationally active banks a priority.

Next Steps

The Consultation is open for feedback until 19 May 2026. The Commission plans to adopt the Delegated Act at the end of the four week consultation period, explaining that the timeline should be sufficient for banks and competent authorities to implement the framework by 1 January 2027.

2. EBA publishes opinion on Commission’s amendments to draft RTS on operational risk under CRR

On 22 April 2026, the European Banking Authority (“EBA”) published an opinion (“Opinion”) on the European Commission’s (“Commission”) amendments to the draft regulatory technical standards (“RTS”) specifying operational risk requirements under articles  314(6), 315(3), 316(3), 317(9), and 321(3) of the capital requirements regulation (“CRR”).

Background

In June 2025 the EBA submitted its final draft RTS to the Commission, setting out, amongst other matters, the components of the business indicator under article 314(9)(a) of CRR, the elements to be excluded from the business indicator under article 314(9)(b)of CRR and on the adjustments to the business indicator under article 315(3)(a), (b) and (c) of CRR – for more information, see FIG Top 5 at 5 dated 19 June 2025.

Subsequently, in August 2025, the EBA submitted a further set of draft RTS to the Commission, addressing, amongst other matters, a risk taxonomy on operational risk that complies with international standards and a methodology to classify the loss events included in the loss data set based on that risk taxonomy under article 317(9) of CRR.

Opinion

The Commission wrote to the EBA, by letter (“Letter”) dated 2 March 2026, stating that it intended to endorse the draft RTS, with amendments. The Opinion is the EBA’s response to the Letter.

In the Opinion, the EBA sets out its view that two of the Commission’s proposed amendments could affect the consistency, transparency and supervisory effectiveness of capital requirements for operational risk and asks that the Commission reconsiders those two amendments, as follows:

• The Commission proposes to amend recital 14 and 16 and articles 9 and 12 of the RTS, allowing institutions to use the prudential boundary approach (“PBA”) in combination with the accounting approach (“AA”). The EBA maintains that the combined approach of the PBA and the AA is not envisaged in the Basel standard and may increase complexity, create inconsistencies across risk frameworks and facilitate regulatory arbitrage, while benefiting only a limited number of institutions.

Accordingly, the EBA is of the view that requiring institutions to apply only one approach to the full balance sheet is necessary to preserve the coherence of the framework; and

• The Commission’s proposed amendment to article 12(3) of the RTS requires institutions to notify competent authorities of only material changes to the scope of the PBA when used in combination with the AA. The EBA is of the opinion that this brings the potential risk of an unlevel playing field and increased complexity in the supervisory action, by introducing institution-specific materiality judgments, making supervisory reviews more complex.

The Opinion also addresses some “non-substantive changes”, confirming its support for those changes as they are of a drafting nature and serve to improve the clarity of the text, without changing the underlying policy framework.

Annex 1 to the Opinion sets out a revised version of articles 9, 12 and 13 of the Commission’s draft RTS, in line with the EBA’s recommended changes.

On 23 April 2026, the European Council (“Council”) published notes from the general secretariat of the Council to the permanent representatives committee (“Coreper”) on the proposals for a directive on payment services and electronic money services in the internal market (“PSD3”) and the proposed Payment Services Regulation (“PSR”).

The notes are as follows:

• proposal for a regulation of the Parliament and of the Council on payment services in the internal market, setting out confirmation of the final compromise text with a view to agreement;
• proposal for a directive of the Parliament and of the Council on payment services and electronic money services in the internal market, setting out confirmation of the final compromise text with a view to agreement; and
• an ‘I’ item note, addressing both PSD3 and PSR, which highlights that the proposed final compromise texts aim to:
  • address challenges that were identified by the European Commission as part of an evaluation of the impact and application of PSD2;
  • tackle payment fraud and increase consumer protection;
  • boost transparency;
  • improve access to cash for consumers; and
  • adapt the payment services rules to new market developments and technological innovations.

Background

The Council agreed its negotiating position regarding PSD3 and PSR in June 2025 – for more information, see FIG Top 5 at 5 dated 26 June 2025. The European Parliament (“Parliament”) adopted its position at first reading in April 2024 – for more information, see FIG Top 5 at 5 dated 25 April 2024.

Next Steps

The ‘I’ item note suggests that Coreper approve the text of both PSD3 and PSR, as set out in the above documents, with a view to reaching an agreement at second reading with the Parliament.