The European Union (Insurance and Reinsurance) (Amendment) Regulations 2017 (“Regulations”) were published on Friday, 25 August 2017. The Regulations introduced a number of important amendments to the European Union (Insurance and Reinsurance) Regulations 2015 (“Solvency II Regulations”) and the Insurance Act 1989 (“Insurance Act”), which apply with immediate effect.
A summary of the amendments introduced by the Regulations are as follows:
- The Solvency II Regulations have been amended to provide an exemption for third country reinsurers carrying on reinsurance activity in the State. The effect of this amendment is that third country reinsurers can now carry on reinsurance activity in Ireland without the need for authorisation from the Central Bank of Ireland (“Central Bank”). This is an important amendment to the Solvency II Regulations and will be welcomed by the industry.
- Reinsurance undertakings which have their head office in the State must obtain the approval of the Central Bank before transferring all or any part of their portfolio to another undertaking. The supervisory authority of the home Member State of the accepting undertaking must certify that the undertaking possesses the necessary eligible own funds to meet the Solvency Capital Requirement under the Solvency II Regulations, before the transfer can take effect.
- The Central Bank is empowered to impose, vary or revoke any condition it considers appropriate when granting a branch authorisation to a third country insurance undertaking under the Solvency II Regulations, or at any time while such an authorisation is effective. The purpose being to ensure that the branch of the undertaking carries out the responsibilities imposed by the Solvency II Regulations in a proper manner.
- The requirement under the Solvency II Regulations that persons concerned with the running of insurance holding companies and mixed financial holding companies be fit and proper has been amended.
- The Regulations also dis-apply section 14 and section 15 of the Insurance Act to insurance undertakings to which the Solvency II Regulations apply, other than certain insurance undertakings which have cease to conduct new insurance business and will be terminating their activity. Section 14 provides for the separation of assets and liabilities attributable to life assurance business. Section 15 sets out the purpose to which assets of undertakings transacting life assurance business are to be applied.