Home Knowledge The Central Bank of Ireland Publishes Intermediary Times Newsletter

The Central Bank of Ireland Publishes Intermediary Times Newsletter

The latest Central Bank of Ireland’s (CBI) Intermediary Times newsletter (Newsletter) covers various topics of interest to (re)insurance intermediaries (Intermediaries), including updates on the Fitness and Probity (F&P) regime, consumer protection matters and business interruption insurance.

Fitness and Probity 

Following thematic inspections of regulated firms’ (including Intermediaries) F&P compliance processes, the CBI published a Dear CEO letter in November 2020. It reminded firms of their legal obligations under the F&P regime and outlined issues to be addressed. 

The Newsletter contains guidance on selecting the appropriate Pre-approved Controlled Function (PCF). The CBI encourages firms to review their functions and determine whether any would meet the PCF roles as listed in the Amending Regulations 2020 (S.I. No 410 of 2020).

The CBI published a F&P interview guide on 10 June 2021. It aims to assist PCF applicants in advance of the F&P interview process.

Consumer Protection Outlook Report 2021

The Consumer Protection Outlook Report 2021 (CPOR) identified the following cross-sectoral risks:

  • Absence of consumer-focused culture.
  • Consumer protection during the Covid-19 pandemic.
  • Ineffective disclosure.
  • Unfair practices and behavioural vulnerability.
  • Risks from technology.
  • Mis-selling & inadequate suitability assessment.

It outlines the CBI’s expectations of how regulated firms (including Intermediaries) should minimise these risks. It also summarises the CBI’s consumer and investor priorities for 2021.

Business Interruption Insurance

The COVID-19 and Business Interruption Insurance Supervisory Framework sets out the CBI’s expectations for Intermediaries’ handling of COVID-19 related business interruption insurance claims using a “consumer-first approach”. In light of the Commercial Court’s decision in February 2021 (see our briefing here), the CBI has reinforced its expectation for Intermediaries to “take a proactive approach in communicating with customers and ensuring the swift resolution of all valid claims”. Where appropriate, assistance should be offered to customers making claims, including alerting customers to policy terms and conditions that may benefit them.

Loss Assessing and Claims Handling

The Newsletter reminds Intermediaries that ‘loss assessing’ and ‘claims handling’ activities on behalf of policyholders are regulated activities under the European Union (Insurance Distribution) Regulations 2018 (IDR). Regulated firms engaging in such activities must be registered as an insurance intermediary under the IDR. The IDR excludes the professional management of claims on behalf of a (re)insurance undertaking, loss adjusting and expert appraisal of claims.

Consumer Protection Code Update 

In May 2021, the CBI updated its Guidance on the Consumer Protection Code (Code) to reflect disclosure obligations on retail intermediaries regarding their commission arrangements under provision 4.58A of the Code. The updated Guidance relates to:

  • the scope of the application of provision 4.58A;
  • the commission information that must be made available to consumers;
  • the use of commission ranges when displaying commission amounts; and
  • the publication and accessibility of the information required under provision 4.58A.

The CBI are currently reviewing the Code and intend to publish a Consultation Paper in the Autumn. The Code is expected to be converted into CBI Regulations under the Central Bank (Supervision and Enforcement) Act 2013.

Retail Intermediary Annual Return

The CBI reminds Intermediaries of their obligation to submit a Retail Intermediary Annual Return (RIAR) to the CBI no later than six months after their financial year end. Industry funding levies for year-end 2020 will be issued on an arrears basis in September 2021. The levies are determined by the total fee and commission incomes reported in the RIAR. These incomes should be checked and verified by Intermediaries prior to submission.

Professional Indemnity Insurance

The Newsletter outlines reporting errors and non-compliance regarding Professional Indemnity Insurance (PII). It reminds Intermediaries that the failure to hold PII, where required, is a breach of the IDR. Intermediaries must hold separate ring-fenced cover for each authorised activity requiring PII cover. 

A specified retroactive date in an Intermediary’s PII policy must match the date of registration under the IDR. This corresponds with an Intermediary’s obligation to have continuous PII cover from its date of registration under the IDR.

Sustainable Finance Disclosure Regulation

The Newsletter provides information on the Sustainable Finance Disclosure Regulation (SFDR). It reiterates the CBI’s expectation for regulated entities to prioritise their sustainable finance obligations.

SFDR requirements include disclosures relating to sustainability risks, how financial products marketed as sustainability-related achieve this, and the impact of investments on the environment and society. See our SFDR briefing here.

The European Supervisory Authorities (ESAs) drafted Regulatory Technical Standards (RTS) under the SFDR. These are expected to be endorsed by the European Commission and have a proposed application date of 1 January 2022. The ESAs recommend using the draft RTS as a reference when applying to the SFDR in the period between the SFDR and RTS applications.

For more information contact a member of the Insurance team or your usual William Fry contact.


Contributed by Cliodhna Hand