On 24 March 2025, the Central Bank of Ireland (Central Bank) published its first Insurance Quarterly Newsletter (Newsletter) of 2025.
The Newsletter includes many noteworthy articles for Irish (re)insurers, including the Central Bank’s annual Regulatory & Supervisory Outlook Report, the use of asset-intensive reinsurance, and the revised Consumer Protection Code (including the Business Standards).
The Regulatory & Supervisory Outlook Report
The Central Bank issued its Regulatory & Supervisory Outlook Report on 28 February 2025 (Report). The Report outlined the Central Bank’s view on key trends and risks throughout the financial sector and was accompanied by a Dear CEO letter outlining the Central Bank’s revised supervisory approach.
The Newsletter highlights the key aspects of the Report, including the Central Bank’s Supervisory Priorities for 2025. These are:
- Proactive risk management and consumer-centric leadership of firms
- Firms are resilient to the challenging macro environment
- Firms address operating framework deficiencies
- Firms manage change effectively
- Climate change and net zero transition are addressed
- The Central Bank enhances how it regulates and supervises.
The Newsletter also focuses on the Central Bank’s priorities for the (re)insurance sector, as addressed in the Report. Key risks identified for the (re)insurance sector were grouped into the following topics in the Report:
- Financial Risks and Resilience
- Culture, Governance & Risk Management
- Business Model & Strategic Risks
- Operational Risks & Resilience
- Climate Change & Environmental Risks
The Central Bank’s new supervisory framework took effect in January 2025. The new approach is underpinned by five key supervisory principles: risk-based, outcomes-focused, firms’ responsibilities, forward-looking, and judgment-led. The Newsletter highlights the Central Bank’s expectation that 2025 will be a “year of dialogue” with firms and sectors as concerns the new supervisory approach to ensure familiarity with its implementation.
(Re)insurers are notified that while some aspects of their supervision may change, the Central Bank’s broader supervisory approach will remain risk-based and proportionate to the nature, scale and complexity of a firm. Firms are reminded that they are expected to comply with their regulatory requirements and the Central Bank’s supervisory expectations.
The Revised Consumer Protection Code
The Central Bank published its revised Consumer Protection Code on 24 March 2025 (Revised CPC). The Revised CPC aims to modernise the current Consumer Protection Code and to enhance consumer protection across areas such as digitalisation, informing effectively, mortgage switching, the provision of unregulated activities by regulated entities, vigilance by firms to the evolving risks of frauds and scams, protecting customers in vulnerable circumstances, tackling the risk of greenwashing, and enhancing requirements in consumer credit, SME protections, insurance and investments and pensions. The Revised CPC includes the new Standards for Business.
Firms will have one year to implement the Revised CPC, which will take effect on 24 March 2026.
The Use of Asset Intensive Reinsurance
The Central Bank is monitoring the increasing use of reinsurance to cover investment risks in the savings and pensions space (primarily unit-linked and with-profits business), which often relies heavily on assets to back liabilities. This practice is known as asset-intensive reinsurance (AIR).
The Newsletter outlines certain risks for life (re)insurance associated with using AIR, including concentration risk, counterparty risk, and recapture risk. It refers firms to the Central Bank’s Guidelines on Recovery Plans, its Guidance on Intragroup Transactions, and EIOPA’s Opinion on Risk Mitigation Techniques to assist with risk mitigation.
As part of monitoring this area, the Central Bank will issue a data request to a subset of life (re)insurance firms in the second quarter of this year. The chosen group will comprise of less than 20 firms. Selected firms will be contacted in April.
The Central Bank hopes that the data request will enable it to assess the materiality of AIR and the nature and extent of its collateralisation more accurately and to clarify the impact of reinsurance counterparty risk on the firms it regulates.
Other Topics
In addition to the above, the Newsletter also provides important practical guidance for financial entities regarding DORA submissions related to contractual arrangements on the use of ICT services by ICT third-party providers, the 2025 QRT reporting submission dates, and EIOPA updates, including EIOPA’s Supervisory Statement on the Treatment of Foreseeable Dividends.
For further reading, please click here to access a copy of the Newsletter on the Central Bank’s website.
If you have any questions on an item covered in the Newsletter, please contact any member of the Insurance & Reinsurance team or your usual William Fry contact.
Contributed by Daniel Gannon, Martha Ní Dhochartaigh.
