Speaking at Insurance Ireland’s Milliman CRO Forum on 24 February 2016, the Director of Insurance Supervision at the Central Bank, Sylvia Cronin, highlighted a number of supervisory and regulatory developments which are of importance to (re)insurers. The speech provided insight on a number of topics including:
- How the supervisory engagement model will operate under Solvency II;
- The redesign of PRISM having regard for Solvency II;
- Risk areas that the Directorate will focus on includinkg group risk, risk culture, cyber risk and external risk;
- Guidance on the ORSA process based on an analysis of reports received in 2014 and 2015; and
- The new divisional structure within the Insurance Directorate.
Ms Cronin also indicated that on-site inspections in 2016 would focus on underwriting, claims, embeddedness of risk management and operational risk and that these would predominantly relate to companies in the domestic market. Additionally, cyber risk is an area of focus for the Central Bank across all sectors, including insurance. The key conclusions were:
- (Re)insurers can expect an increased level of supervision under the new PRISM engagement model which is likely to include an increased level of on-site activity.
- As Solvency II is now implemented, the supervisory focus will shift to looking for evidence that the risk management frameworks designed and put in place are operating in practice and that a risk culture is being driven from the top down.
- (Re)insurers can expect increased supervisory activity in the areas of pricing and reserving risk, operational and conduct risk and also an enhanced engagement model around group supervision and group risk.
- The Central Bank will continue to engage on emerging risks: how these are identified by (re)insurers, how these are treated in the ORSA and how (re)insurers plan to mitigate these risks.
To read the speech in full, please click here.
Contributed by John Larkin
