In January, the Central Bank issued a notice to Irish authorised insurers and reinsurers (including captives) requiring a compliance statement to be submitted to the Central Bank under Section 25 of the Central Bank Act 1997 (the “Section 25 Compliance Statement”).  This Section 25 Compliance Statement confirms whether the (re)insurer has complied with its relevant obligations during the compliance period.

Relevant Obligations

The meaning of “relevant obligations” will vary depending on the type of company referred to in the statement:

• For life and non-life insurers, relevant obligations include Irish insurance legislation and the Central Bank’s Corporate Governance Code for Credit Institutions and Insurance Undertakings (the “CGC Code”).
• For captive insurers (life and non-life), relevant obligations include Irish insurance legislation and the Corporate Governance Code for Captive Insurance and Captive Reinsurance Undertakings 2011 (the “Captive CGC Code”).
• For reinsurers, the relevant obligations are the Reinsurance Regulations and the CGC Code.
• For captive reinsurers, the relevant obligations are the Reinsurance Regulations and the Captive CGC Code.

Compliance Period and Returns to the Central Bank

The compliance period is the (re)insurers most recent financial year.  The Section 25 Compliance Statement must be submitted (at the latest) with the annual return to the Central Bank. Each person who is a director as of the date of submission should confirm the accuracy of the information in the Section 25 Compliance Statement.

Guidelines on completing the Section 25 Compliance Statement are available on the Central Bank’s website. Failure to submit Section 25 Compliance Statement may expose the undertaking and/or its management to criminal prosecution or administrative sanction.

Ongoing Obligations

Insurers and reinsurers will need to review their compliance procedures to ensure they can make the Section 25 Compliance Statement.

Insurers and reinsurers should also note that the Section 25 Compliance Statement is in addition to the “Directors’ Compliance Statement” required to be submitted as part of a (re)insurers annual return.

Contributed by  Niall Campbell