IRELAND Law and Practice Contributed by: Grainne Callanan, April McClements and Aisling Kavanagh, Matheson LLP
Central Bank of Ireland The CBI has primary responsibility for the prudential supervision and regulation of (re)insurance undertak- ings in Ireland. The CBI performs this role through monitoring and ongoing supervision, and issues standards, policies, and guidance that (re)insurance undertakings must comply with. The CBI oversees the corporate governance func- tions, risk management and internal control systems of (re)insurance undertakings without imposing bur- densome administrative requirements on their opera- tors. Such undertakings are required to submit annual and quarterly returns on solvency margins and techni- cal reserves for supervisory purposes. The CBI also conducts regular themed inspections across the (re) insurance sector. The CBI operates a rigorous authorisation process and conducts fitness and probity (F&P) assessments of individuals who are to hold certain designated man- agement functions and positions within authorised firms. It also has responsibility for consumer protec- tion issues. Risks and risk ratings An administrative sanctions regime provides the CBI with a credible enforcement tool and acts as an effec- tive deterrent against breaches of financial services law. The CBI’s supervisory framework, Probability Risk and Impact SysteM (PRISM), is a risk-based frame- work that categorises regulated firms by the poten- tial impact of their failure on the economy and the consumer. PRISM was introduced in 2011. In Janu- ary 2025, the CBI implemented a new supervisory approach to reflect changes in its regulatory respon- sibilities and the sectors it supervises. Under this updated framework, prudential impact ratings are no longer the primary driver of supervision intensity but remain a relevant input for supervision and for certain CBI Regulations, Requirements and Guidance in spe- cific sectors. Consumer protection risk assessments The CBI’s Consumer Protection Risk Assessment (CPRA) model aims to enhance the way regulated entities manage “the risks they pose to consumers and ensure they have appropriate risk management
frameworks to deliver for their customers”. (Re)insur- ance companies must implement a consumer protec- tion risk management framework that is tailored to the nature, scale and complexity of their business. The CBI assesses the effectiveness of these internal management frameworks through targeted CPRAs, in addition to regular thematic inspections. II Code The Insurance Institute’s Code of Ethics and Conduct (the “II Code”) is also relevant to the regulation of (re) insurance undertakings. The II Code is a voluntary code of conduct intended to protect policyholders resident in Ireland. It has been adopted by members of Insurance Ireland, the representative body for (re) insurance undertakings in Ireland. The 2015 Regulations EU Directive 2009/138/EC (“Solvency II”) introduced a common regulatory framework for European Eco- nomic Area (EEA) (re)insurance undertakings and was transposed into Irish law by the European Union (Insurance and Reinsurance) Regulations 2015 (the “2015 Regulations”). The 2015 Regulations impose harmonised capital and solvency requirements, valua- tion techniques, and governance and reporting stand- ards. They also impose certain restrictions on share- holders of (re)insurance undertakings, as the CBI will not grant an authorisation to an undertaking if it is not satisfied as to the suitability and F&P of “qualifying” shareholders. For the purposes of the 2015 Regulations, a qualifying shareholding means a direct or indirect holding in an undertaking that: • represents 10% or more of the capital or voting rights of the undertaking; or • makes it possible to exercise a significant influence over the management of the undertaking. Insurance Distribution Regulations The European Union (Insurance Distribution) Regula- tions 2018 (IDR) transposed the Insurance Distribution Directive (EU) 2016/97 (IDD) into Irish law. The IDD harmonises the distribution of (re)insurance products within the EU, with the aim of facilitating market inte-
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