Central Bank of Ireland on Third-Party Arrangement in Insurance Sector
Central Bank of Ireland published a discussion paper on how undertakings that enter third-party arrangements adequately identify, assess, and mitigate against all material risks that they introduce. Central Bank of Ireland has observed a practice in the insurance sector whereby a number of insurance and reinsurance undertakings are seeking to enter arrangements for the use of separate legal entities for the provision of extensive staffing to the undertaking. Stakeholders can respond to this discussion paper by January 31, 2020.
The discussion paper focuses in on issues such as:
- The appropriateness and adequacy of the initial and ongoing risk identification and management in relation to the arrangement
- The adequacy of the protections provided for policyholders and other beneficiaries on an ongoing basis and in stress scenarios
- The substance in the Irish undertaking
The paper seeks to explore these issues further by posing questions to interested stakeholders on how the boards and senior management of undertakings do or can satisfy themselves that these arrangements are appropriate for their undertakings and provide for adequate and effective governance of same. Also, Central Bank of Ireland intends to find out how undertakings ensure adequate identification and management of all material risks, including risks that would arise in stress scenarios.
Related Link: Discussion Paper
Comment Due Date: January 31, 2020
Keywords: Europe, Ireland, Insurance, Reinsurance, Third-Party Arrangements, Governance, Stress Scenarios, Central Bank of Ireland
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