Featured Product

    Ed Sibley of Ireland Details Strategic Priorities for Insurance Sector

    February 18, 2019

    Ed Sibley, the Deputy Governor (Prudential Regulation) of the Central Bank of Ireland, spoke at the Central Bank Insurance Conference on “Thriving in Challenging Times” in Dublin. He detailed the five broad strategic priorities of the Central Bank of Ireland for the insurance sector, as outlined in the strategy for 2019 to 2021. The priorities are maintaining resilience of the system, dealing with Brexit-related issues, strengthening consumer protection, engaging and influencing, and enhancing organizational capability.

    Mr. Sibley mentioned that insurers must operate in line with the domestic and international regulatory regime. The risk-based supervision of insurance firms is delivered in line with this regime, is anchored by the Probability Risk and Impact System (PRISM) methodology, and strives to ensure that the system and individual firms operating within it are appropriately resilient. In the recent years, volatility in the cost of insurance in Ireland has undoubtedly caused challenges for insurance customers. However, he stated that the boards and management of regulated firms are expected to ensure that their firms are sufficiently resilient. Mr. Sibley further noted that recovery and resolution planning for insurance firms also requires further work. He added that the regulatory regime for insurance is not sufficiently robust or consistent across Europe. This issue is accentuated by the inconsistency in insurance compensation schemes across Europe—an issue for both home and host supervisors. In addition to pushing for further developments at the European level, the Central Bank of Ireland is driving firms to improve how they execute recovery planning and to advance its own approach to resolving insurance firms.

    He emphasized that the focus on culture and lack of diversity at senior levels in the financial system extends beyond the banking system and the Central Bank will work on this in the insurance sector in 2019. Mr. Sibley said, "We are only in the foothills of the potential testing of the resilience of the financial system that a hard Brexit will cause. It has short-term and long-term implications for the structure of the Irish economy and the Irish financial system. Any form of Brexit will be damaging for Ireland, with a hard Brexit especially so. Recognizing these risks, the Central Bank of Ireland has been focused on Brexit risks since before the 2016 UK referendum. In recent months, we have stepped up our work on mitigating the most material ‘cliff-edge’ risks of a hard Brexit." From a financial regulation perspective, work the Central Bank of Ireland has sought to ensure the financial system is resilient enough for a hard Brexit not to cause significant financial stability risks. A proportionate, robust, efficient, and effective authorization process is being delivered in line with European regulatory norms, for the firms seeking authorization in Ireland as a result of Brexit.

    For insurance, the majority of firms covering the vast majority of policies written are taking appropriate action. The Central Bank of Ireland has worked with the Department of Finance to support the drafting of legislation to protect customers of insurance products in the event of a no-deal Brexit. Additional uncertainties faced by the insurance industry include the following:

    • More frequent and severe storms, floods, and droughts have already affected insurers. Further increases in the number and severity of disruptive climatic events look certain. Furthermore, as the Governor of the Central Bank of Ireland recently remarked, the financial system (including the insurance industry) has a crucial role to play in the transition to a lower carbon economy.
    • Insurance is also at the forefront of the opportunities and challenges that arise from disruptive technology change, both in how the services are provided and the services are needed.
    • Demographic changes across Europe are profound, with an increasingly aged population needing to be served for a longer period of time.

    Finally, Mr. Sibley highlighted that the introduction of Solvency II represented a significant milestone for the insurance industry. To ensure that the Solvency II regime continues to develop, remain relevant, and appropriately protect policyholders and beneficiaries, the Solvency II review is scheduled for 2020. This review will provide the opportunity to examine the practical implementation of Solvency II and to ensure that it remains fit-for-purpose, adapts to changes in market conditions and evolving business models, and continues to meet its fundamental objectives. Input to the 2020 review of Solvency II will be a key area of focus for the Central Bank of Ireland this year.

     

    Related Links

    Keywords: Europe, Ireland, Insurance, Resolution Planning, Brexit, Solvency II, Financial Stability, Central Bank of Ireland, BIS

    Featured Experts
    Related Articles
    News

    BCBS Consults on Revised Disclosures for Market Risk Framework

    BCBS launched a consultation on the revised disclosure requirements for the market risk framework for banks.

    November 14, 2019 WebPage Regulatory News
    News

    FSB Examines Implementation of Resolution Regimes in Financial Sector

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions and sets out plans for further work.

    November 14, 2019 WebPage Regulatory News
    News

    PRA Publishes Final Policy on Maintenance of TMTP Under Solvency II

    PRA published the policy statement (PS25/19) that contains the final supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTPs) under Solvency II.

    November 14, 2019 WebPage Regulatory News
    News

    BCBS Consults on Disclosure Templates of Sovereign Exposures of Banks

    BCBS published a consultation on the voluntary disclosure templates related to sovereign exposures of banks.

    November 14, 2019 WebPage Regulatory News
    News

    IAIS Adopts ComFrame, ICS, and Holistic Framework for Systemic Risk

    IAIS adopted a comprehensive set of reforms—Common Framework (ComFrame), Insurance Capital Standard (ICS) Version 2.0, and Holistic Framework for Systemic Risk—that will enable effective cross-border supervision of insurance groups and contribute to global financial stability.

    November 14, 2019 WebPage Regulatory News
    News

    PRA Publishes Templates for Statistical Disclosures Under Solvency II

    PRA published templates for statistical disclosures, as required under Article 31(2) of the Solvency II Directive.

    November 14, 2019 WebPage Regulatory News
    News

    FASB Proposes Improvements to Derivatives and Hedging Standard

    FASB proposed an Accounting Standards Update, on codification improvements to hedge accounting under Topic 815, to clarify certain sections of the 2017 hedge accounting standard (Update 2017-12).

    November 13, 2019 WebPage Regulatory News
    News

    FASB Approves Guidance to Assist in Transition to New Reference Rates

    FASB approved an Accounting Standards Update (Topic 848) to provide temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the reference rate reform on financial reporting.

    November 13, 2019 WebPage Regulatory News
    News

    BIS and MAS Launch Innovation Hub in Singapore

    BIS and MAS launched the BIS Innovation Hub Center in Singapore.

    November 13, 2019 WebPage Regulatory News
    News

    MAS and Industry to Create Framework for Adoption of Responsible AIDA

    MAS announced that it is working with financial industry partners to create a framework for financial institutions to promote the responsible adoption of Artificial Intelligence and Data Analytics (AIDA).

    November 13, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4142