The Central Bank of Ireland (CBI) published its latest half-yearly Regulatory Service Standards Performance Report covering July to December 2022 (Report).
We outline below the main takeaways for the (re)insurance sector from the Report. Importantly, the Report also outlines some changes to the IQ process for Pre-approval Controlled Function holders (PCFs), which take effect in line with the transition to the CBI’s new portal on 24 April 2023.
The Report sets out the CBI’s performance against the service standards it has committed itself to in terms of various supervisory actions, including the approval of PCF applications and authorisation applications across all financial services sectors. According to the CBI’s figures, there were two successful applications for the authorisation of (re)insurers in the reporting period, which were both assessed within the applicable service standard of six months from receipt of all data. Three applicants had their applications returned owing to incomplete documentation within two weeks of filing (noting that it is unclear if these three applicants include the aforementioned two successful applicants or not).
In terms of (re)insurance intermediaries, the Report shows that of the 240 authorisation applications submitted (which includes all retail intermediaries and debt management firms), 91 were returned for failing the key information check performed by the CBI upon receipt of the initial application. The CBI highlights that it is continuing to host quarterly webinars on the retail intermediary application process (Form A specifically) to provide guidance and helpful tips. This will be of interest to prospective applicants.
The Report indicates that all service standards were met with respect to the PCF approval process, including the 12% of the total applications relating to the (re)insurance sector. It is noteworthy that common reasons cited by the CBI for applications being returned were: (a) insufficient due diligence performed by the proposer, (b) applicants not providing a complete list of directorships/senior positions and (c) incomplete supporting documentation to demonstrate compliance with the Minimum Competency Code 2017.
Interestingly, the CBI explains that it conducted a short consultation with various industry stakeholders to seek their input into what is included in the Report. The Report appears broadly in line with prior reports, save for some additional narrative.
Changes to PCF IQ Application Process
The Report explains that some changes are being made to the PCF application process. Most notable are the additional questions in the IQ relating to:
- applicant competencies and the applicant’s knowledge of the firm’s business;
- remuneration clawbacks for alleged wrongdoing;
- whether probity issues affect the applicant’s suitability for the role; and
- time commitments and capacity to perform the role for part-time workers.
In addition, an F&P profile will be available on the CBI’s Portal, where a PCF applicant will be asked to enter certain information before commencing the PCF application process, including personal details to uniquely identify/contact the applicant; professional experience for the last ten years, qualifications, training and professional memberships; approvals/ withdrawals by other regulators, and positions in other entities (non-financial firms). The CBI will also seek to collect an applicant’s personal details on a consent basis to improve its reporting on diversity in the financial services sector.
The Report also outlines some welcome changes being made to the IQ submission process in response to industry feedback. This includes the ability of applicants to:
- prepopulate and maintain personal data;
- view previous submissions and print IQs; and
- view an IQs status, and identify which CBI team is conducting the assessment.
We suggest firms review the draft guidance paper published by the CBI, which provides a step-by-step guide on completing the new IQ process. A finalised version of the guidance paper is expected to be published on the CBI website shortly.
The CBI’s new IT system that supports these IQ applications will facilitate clear error messaging in the context of uploading supporting documentation. Before the new IT system goes live, the CBI plans to communicate with all regulated firms explaining the preparations required to use the new system and the publication of the new PCF IQ.
If you wish to discuss this topic further, please contact any member of the Insurance Team or your usual William Fry contact.
Contributed by Catherine Carrigy & Rory Carbery