On 8 December 2022, the Central Bank of Ireland (the Central Bank) reprimanded and fined AXA Life Europe DAC (ALE), an Irish cross-border life insurer, €3,640,000 pursuant to its Administrative Sanctions Procedure. This was in respect of three breaches under the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994) (1994 Framework Regulations), the Corporate Governance Requirements for Insurance Undertakings and the Solvency II Commission Delegated Regulation (EU) 2015/35 (Solvency II Delegated Regulation). According to the Central Bank, the three breaches consisted of:
- ALE’s risk management systems over an extended period did not provide for an effective process to identify, manage, monitor and report the risks arising from approximately 30,000 policies sold through its German branch. These policies used marketing materials referencing an unqualified guarantee provided by ALE’s parent company;
- ALE failed to establish effective conflict of interest policies and procedures over a six-year period; and
- ALE failed to conduct an adequate assessment of potential conflicts of interest when the Board of ALE considered issues relating to the guarantee at a meeting in July 2018.
The three breaches were admitted by ALE, and the Central Bank acknowledged that no previous enforcement action had been taken against ALE.
To view a copy of the Central Bank’s Press Release on this topic, please see here.