This document provides answers to questions about insurance regulation in Ireland. It discusses how insurance contracts are regulated, how different types of insurers are regulated, the regulation of insurance brokers and intermediaries, the authorization process for insurers, restrictions on ownership of insurers, the ability to insure risks without a license, and penalties for operating without permission. The key regulator is the Central Bank of Ireland, which regulates insurers, reinsurers, and intermediaries but does not oversee the writing of insurance contracts directly. Authorization typically takes 6 months but can be quicker for reinsurance vehicles. There are no restrictions on ownership of insurers. Operating insurance business without a license is an offense subject to fines or imprisonment.

1. Country Author: Matheson
The Legal 500
Sharon Daly, Partner
sharon.daly@matheson.com
The Legal 500
April McClements, Partner
april.mcclements@matheson.com
The Legal 500
Darren Maher, Partner
darren.maher@matheson.com
The Legal 500
The Legal 500 & The In-House Lawyer
Comparative Legal Guide
Ireland: Insurance & Reinsurance
This country-specific Q&A gives a pragmatic overview
of the law and practice of insurance & reinsurance
law in Ireland.
It addresses topics such as contract
regulation, licensing, penalties, policyholder
protection, alternative dispute resolution as
well as personal insight and opinion as to the future
of the insurance market over the next five years.
This Q&A is part of the global guide to Insurance &
Reinsurance. For a full list of jurisdictional Insurance
& Reinsurance Q&As
visit http://www.inhouselawyer.co.uk/index.php/pract
ice-areas/insurance-reinsurance
How is the writing of insurance contracts regulated in the1.
jurisdiction?
There is no statutory definition of a contract of insurance under Irish law, nor are there specific
rules for the formation of an insurance contract beyond the general principles of contract law
and the duty of utmost good faith. As a result, the law in relation to insurance contracts in
Ireland is primarily governed by common law principles, the origins of which can be found in case
law. Irish legislation does not specify the essential legal elements of an insurance contract and

2. the courts have considered it on a case-by-case basis.
The Central Bank of Ireland (the “Central Bank”) is responsible for the prudential regulation of
(re)insurance undertakings and intermediaries operating in Ireland. The European Communities
(Insurance and Reinsurance) Regulations 2015 (the "2015 Regulations"), which transposed
Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009
(“Solvency II”) into Irish law, sets out the regulatory framework within which insurance activity
may be carried on by (re)insurers in Ireland. The 2015 Regulations received minor amendments
by way of the European Union (Insurance and Reinsurance) (Amendment) Regulations 2017 (the
“2017 Regulations”).
Generally speaking, the Central Bank has no involvement in supervising the writing of insurance
contracts and insurers retain significant freedom of contract. However, the Central Bank may,
from time-to-time, request that an insurer provides its general and special policy conditions,
scales of premiums and other documents which the insurer uses in its dealing with policy
holders. The Central Bank may request such information in respect of an insurance contract in
order to verify its compliance with applicable requirements, namely the Unfair Terms in
Consumer Contracts Directive 1993/13/EC, the Distance Marketing of Financial Services Directive
2002/65/EC, the Consumer Protection Code 2012 and the Consumer Protection Act 2007. The
Sale of Goods and Supply of Services Act 1980 is also applicable to insurance contracts.
In addition, the supervisory role of the Central Bank involves ongoing review and assessment of
an undertaking’s corporate governance, risk management and internal control systems for
example. The Central Bank is also empowered to conduct regular themed inspections across the
industry.
It should be noted that the Central Bank does not require the submission of product documents
by insurance undertakings operating in the Irish market.
Are types of insurers regulated differently (i.e. life companies,2.
reinsurers)?
Prior to the implementation of Solvency II through the 2015 Regulations, distinct regulations
governed the activity of life insurance, non-life insurance and reinsurance in Ireland.
The 2015 Regulations now provide a uniform regulatory framework for each type of business and
the Central Bank adopts a consistent approach in its supervision of these entities. However,
given the difference in the nature of business carried on by each distinct insurer, the 2015

3. Regulations, together with the Insurance Acts 1909-2011, do make certain distinctions between
the carrying on of non-life insurance, life insurance or reinsurance business.
From an approach perspective, the Central Bank has adopted the PRISM or the Central Bank’s
“Probability Risk and Impact SysteM” which is a systemic risk-based framework against which
the Central Bank assesses supervisory requirements i.e. entities that are categorised as being
high-impact under PRISM are subject to a higher level of supervision by the Central Bank. PRISM
recognises that the Central Bank does not have infinite resources and selectively deploys
supervisors according to a firm’s potential impact and probability for failure. All regulated firms
are categorised as high-impact (including ultra-high), medium-high, medium-low or low. The
ratings are set according to the systemic risk posed by regulated entities, and firms are assigned
one of the categories set out below. Although relatively few in number, high-impact firms are the
most important for ensuring financial and economic stability and are therefore subject to a
higher level of supervision.
Are insurance brokers and other types of market intermediary3.
subject to regulation?
A person (or firm) cannot undertake, or claim to undertake, insurance mediation activities unless
they are registered with the Central Bank pursuant to the European Communities (Insurance
Mediation) Regulations 2005 (the “2005 Regulations”) or are passporting into Ireland on a
freedom of establishment or freedom of services basis.
Insurance undertakings and intermediaries that manufacture any insurance product for sale to
customers are required to implement product oversight and governance procedures prior to
distributing or marketing an insurance product to customers. A target market must be identified
for each product to ensure that the relevant risks to that target market are identified, assessed
and regularly reviewed. In addition, insurance intermediaries are required to disclose the nature
of any remuneration received in relation to an insurance contract to the customer.
Under the 2005 Regulations, “insurance mediation” means “any activity involved in proposing or
undertaking preparatory work for entering into insurance contracts, or of assisting in the
administration and performance of insurance contracts that have been entered into (including
dealing with claims under insurance contracts)….”. The broad definition of insurance mediation
contains important carve-outs excluding certain activities from that definition for the purposes of
the 2005 Regulations. For example, activities specifically excluded from the definition include an
activity: (a) that is undertaken by an insurer or an employee of such an undertaking in the
employee’s capacity, (b) involves the provision of information on an incidental basis in
conjunction with some other professional activity, so long as the purpose of the activity is not to

4. assist a person to enter into or perform an insurance contract, or (c) involves the management of
claims of an insurance undertaking on a professional basis; or (d) involves loss adjusting or
expert appraisal of claims for reinsurance undertakings.
In Ireland, the 2005 Regulations captures most activities that insurance agents engage in other
than limited back office claims management. However, the definition of insurance mediation in
the 2005 Regulations refers to activities that include ‘dealing with claims’ and not the
management of such claims. Therefore, it is the generally accepted understanding that
insurance undertakings who engage solely in the administration of insurance claims, without
assisting the insured with regard to claims are not governed by the 2005 Regulations.
On applying to the Central Bank to be registered as an insurance intermediary, the applicant
must satisfy a number of criteria for authorisation, which include:
the good reputation of directors;
the knowledge and ability of senior management and key personnel;
the holding of minimum levels of professional indemnity insurance; and
maintenance and operation of client premium accounts.
The Central Bank maintains a register of authorised insurance intermediaries in Ireland and is
responsible for supervising their compliance with regulatory requirements by way of advertising
monitoring, themed inspections, general inspections and mystery shopping. Intermediaries are
generally ranked as ‘Low Impact’ under the Central Bank’s supervisory framework, the
Probability Risk and Impact System (“PRISM”). Therefore, intermediaries are subject to a lower
level of supervision than imposed by the Central Bank on insurers and reinsurers.
The Irish Investment Intermediaries Act 1995 (the “IIA”), has not been disapplied and continues
to govern the regulations of intermediaries despite the 2005 Regulations. As such, two pieces of
Irish legislation govern intermediaries operating in Ireland. In practice, however, the Central
Bank treats the provisions of the IIA as having been formally disapplied, although this is not
strictly accurate. As such, technically the IIA is still inforce and insurance intermediaries should
continue to comply with the IIA as well as the provisions of the 2005 Regulations.
The Insurance Distribution (Recast) 2016/97 (the “IDD”) was required to be transposed into Irish
law by 23 February 2018, at which point the provisions of the 2005 Regulations were to be
repealed. However, owing to discussions held at European level, the transposition date of the
IDD has been postponed to 1 October 2018. Like its predecessor, the IDD is a 'minimum
harmonising' directive. The IDD creates a minimum legislative framework for the distribution of

5. (re)insurance products within the EU and aims to facilitate market integration and enhance
consumer protection. The IDD introduces general consumer protection principles for all insurance
distributors to act honestly, fairly and professionally and in accordance with the best interests of
the customer.
The EU Regulation on Key Information Documents for Packaged Retail and Insurance-based
Investment Products (EU1286/2014) (the “PRIIPs Regulation”), supplemented by the PRIIPs
Regulatory Technical Standards 2017 (Delegated Regulation 2017/653) (“RTS”) came into effect
on 1 January 2018. The PRIIPs Regulation is a key piece of legislation; which aims to enable retail
investors to understand and compare the key features and the potential risks and rewards of
investment products, funds and investment-linked insurance policies. The objective of the PRIIPs
Regulation is to ensure that a common standard for Key Information Documents (“KIDs”) is
established in a uniform fashion so as to be able to harmonise the format and the content of
those documents.
A PRIIP means “an investment product where the amount repayable to the retail investor is
subject to fluctuations because of exposure to reference values or to the performance of one or
more assets which are not directly purchased by the retail investor; or an insurance product
which offers a maturity or surrender value and where that maturity or surrender value is wholly
or partially exposed, directly or indirectly, to market fluctuations”.
The PRIIPs Regulation applies to persons who: (i) manufacture PRIIPs for sale to retail investors in
the EEA or make changes to an existing PRIIP including, but not limited to, altering its risk and
reward profile or the costs associated with an investment in a PRIIP (“PRIIP Manufacturer”); or (ii)
advise on or sell PRIIPs to retail investors in the EEA.
The wide scope of PRIIPs Regulation means that all PRIIP Manufacturers and financial
intermediaries that distribute PRIIPs to retail investors fall within its scope. Certain products,
including non-life insurance products and pension products, are specifically excluded from the
PRIIPs Regulation and UCITs are not obliged to comply with PRIIPs until 1 January 2020.
Is authorisation or a licence required and if so, how long does it4.
take on average to obtain such permission?
Undertakings cannot carry on (re)insurance business in Ireland without authorisation from the
Central Bank or from another recognised EU regulator through the ‘single passport’ regime.
On applying for authorisation, an applicant will typically meet with Central Bank representatives

6. on a number of occasions. In the first instance, the applicant will have a preliminary meeting
with the Authorisations Team of the Central Bank. Thereafter, the application proceeds through
the submission of a detailed business plan to the Central Bank. The Central Bank will take a
number of months to review the application. During the review process, it will typically request
additional information and documentation and is likely to have comments on certain features of
the application for authorisation. The Central Bank may seek additional meetings with the
applicant as part of this process in order to discuss aspects of the proposal in further detail.
The Central Bank has a statutory six month time period within which to consider a fully
completed application for authorisation as an insurance undertaking. Once an undertaking is
authorised by the Central Bank it is licensed to carry on insurance or reinsurance activity across
the EEA. The Central Bank does not currently charge a fee for licence applications.
A reinsurance provider can establish a special purpose reinsurance vehicle, which provides a
quicker and simpler route to authorisation and reduces the extent of supervision by the Central
Bank as compared with fully regulated reinsurers.
Are there restrictions over who owns or controls insurers5.
(including restrictions on foreign ownership)?
The authorisation process requires the submission of details of all of the entity’s proposed
shareholders to the Central Bank. However, there are no restrictions on the ownership or control
of an insurance or reinsurance undertaking, other than the requirement that the proposed
controller must be of good standing. The European Union (Anti-Money Laundering: Beneficial
Ownership of Corporate Entities) Regulations 2016 have introduced increased disclosure
requirements in respect of ownership of corporate entities. These regulations require entities to
maintain a register of the beneficial owner (i.e., the natural person who ultimately owns or
controls the share capital or the voting rights or has control by any other means of the
undertaking) in order to ensure greater transparency of ownership.
The application for authorisation requests details of any proposed person that will ‘qualifying
holding’ in the applicant. A ‘qualifying holding’ is defined in the 2015 Regulations as a holding
representing 10% or more of the capital or voting rights, or which makes it possible to exercise a
significant influence over the management of the undertaking. Furthermore, where there is a
change in the ownership or control of a regulated entity, the 2015 Regulations require certain
notifications to be made to the Central Bank. The acquisition, increase and/or disposal of a
‘qualifying holding’ triggers the requirement to notify the Central Bank. The Central Bank will
assess any proposed acquisition by reference to, amongst others, the financial soundness of the
proposed acquirer and the suitability of all proposed directors and senior management in

7. accordance with its Fitness and Probity regime (to ensure the sound and prudent management of
the undertaking).
Is it possible to insure risks without a licence or authorisation?6.
(i.e. on a non-admitted basis)?
Prior to the introduction of Solvency II, (re)insurance activity was regulated at an EU level by
Directives 88/357/EEC, 90/619/EEC, 92/49/EEC and 92/96/EEC (together “Solvency I”). Under
Solvency I, it was possible for third-country (re)insurers to write business in Ireland on a non-
admitted basis subject to compliance with certain conditions. However, these provisions were
not carried over into Solvency II. The market has viewed this as an oversight in the legislation
and there has been on-going lobbying by the insurance industry to have the 2015 Regulations
amended in order to permit third-country (re)insurers to write business in Ireland on a non-
admitted basis, as was originally provided for under the Solvency I regime.
What penalty is available for those who operate without7.
appropriate permission?
A (re)reinsurance undertaking, which operates in Ireland without the requisite authorisation from
the Central Bank commits an offence under the 2015 Regulations. The Central Bank plays a
pivotal role in the supervision and regulation of financial service providers in Ireland to ensure
compliance with regulatory requirements. The Central Bank’s administrative sanctions regime
provides it with a credible tool of enforcement and acts as an effective deterrent against
breaches of financial services law.
Where an offence is committed by an undertaking, and it can be proven that the offence was
committed with the consent or connivance, or was attributable in any way to the wilful neglect of
a person in management of the undertaking, the Central Bank has the power prosecute the
relevant person, as well as the undertaking. Therefore, a director, manager, secretary, other
officer of the company or any person purporting to act in that capacity could be subject to
prosecution from the Central Bank for the unauthorised operations of an insurance or
reinsurance undertaking.
The penalties which can be imposed by the Central Bank will depend on the seriousness of the
offence. If convicted of a summary offence (ie a more minor offence) the undertaking and / or
relevant person is liable to a fine not exceeding €5,000 or to imprisonment of a term not
exceeding 12 months, or to both. On conviction on indictment (ie a more serious offence, which
operating without a licence most likely constitutes) the undertaking and / or relevant person is
liable to a fine not exceeding €500,000 or to imprisonment for a term not exceeding 3 years, or

8. to both.
If an undertaking continues to operate in Ireland without authorisation, the undertaking and / or
relevant person will be guilty of an offence for each day on which the contravention continues
and liable for a fine of €500 for each such offence.
How rigorous is the supervisory and enforcement environment?8.
Ireland has a well-established efficient prudential regulatory infrastructure that complies with
best international standards. As above, the Central Bank’s prudential supervisory framework,
PRISM, focuses on the most significant firms, the risks they pose and the level of damage they
could cause to the financial system, the economy and consumers if they were to fail. Following
the economic crash in Ireland, the Central Bank is intent on ensuring a rigorous and effective
supervisory and enforcement framework is in place. The Central Bank’s Administrative Sanctions
Regime acts as an effective deterrent against breaches of financial services law. The Central
Bank has the power, where a breach is identified, to issue a supervisory warning, take
supervisory action, agree a settlement, or refer the case to formal inquiry for determination and
sanction.
The Central Bank’s supervisory role involves overseeing an undertaking’s corporate governance,
risk management and internal control systems. Insurance and reinsurance undertakings are
required to submit annual and quarterly returns on solvency margins and technical reserves to
the Central Bank for assessment. In addition, the Central Bank conducts regular themed
inspections across the insurance and reinsurance industry.
How is the solvency of insurers (and reinsurers where relevant)9.
supervised?
Insurers and reinsurers regulated by the Central Bank are required to meet the capital and
solvency requirements set out under Pillar 1 of Solvency II, as transposed by the 2015
Regulations into Irish law.
To comply with the enhanced Solvency II regulatory reporting requirements in respect of
solvency, Irish authorised (re)insurers are required to submit the following information to the
Central Bank:
a solvency and financial condition report (“SFCR”);
detailed annual and quarterly reports supplementing information contained in the

9. solvency and financial condition report;
a regular supervisory report, at least every three years, containing specific information
regarding the business and performance of the insurer, its system of governance, risk
profile, capital management and information relating to its valuation of assets, technical
provisions and other liabilities for solvency purposes;
an annual own-risk and solvency assessment supervisory report, setting out the results of
the own risk and solvency assessment performed by the life insurer; and
other reports required by the Central Bank.
In supervising the solvency of an undertaking, the Central Bank may also require an insurer to
provide it with a certificate of the value of the assets representing the technical provisions on the
closing date on which the accounts and balance sheets of the insurer were provided to the
Central Bank.
What are the minimum capital requirements?10.
The Solvency II capital requirements prescribed in the 2015 Regulations are calculated based on
the specific risks borne by the relevant insurer and are prospective in nature. In calculating its
solvency and capital requirements insurers are required to include both existing business and
any new business expected to be written over the following 12 months. Solvency II imposes a
solvency capital requirement (“SCR”) and a lower, minimum capital requirement (“MCR”) on
insurance undertakings.
An insurance undertaking may calculate the SCR based on the formula set out in the 2015
Regulations or by using its own internal model approved by the Central Bank. The SCR should
amount to a high level of eligible own funds, thereby enabling the undertaking to withstand
significant losses and ensure a prudent level of protection for policyholders and beneficiaries.
The MCR should be calculated in a clear and simple manner, corresponding to an amount of
eligible basic own funds, below which policyholders and beneficiaries would be exposed to an
unacceptable level of risk if the undertaking were allowed to continue its operations.
An insurance undertaking must have procedures in place to immediately identify and inform the
Central Bank of any deterioration in its financial condition. As such, the reporting requirements in
respect of SCR and MCR provide for clear channels by which the Central Bank can monitor the
financial state of an insurance undertaking. In the event of a breach of capital requirements, the
Central Bank will employ an escalating level of supervisory intervention, beginning with the
implementation of a recovery plan by an insurance undertaking, as approved by the Central
Bank. Where there is a breach of the SCR or MCR, compliance must be re-established within six

10. months or three months respectively, otherwise the Central Bank may restrict the free disposal
of the assets of the undertaking and ultimately withdraw its authorisation.
Is there a policyholder protection scheme?11.
The Insurance Compensation Fund (the “Fund”) provides compensation to eligible policyholders
of an Irish-authorised non-life insurer or an EU-authorised non-life insurer, which carries on
business in Ireland, and which has gone into liquidation or administration. Non-life insurance
companies writing business in Ireland are required to contribute 2% of gross written premium in
respect of Irish situate risk to the Fund. The Central Bank is responsible for assessing the
financial position of the Fund and determining the appropriate contribution to be paid.
The approval of the High Court of Ireland is required for a payment to be made out of the Fund.
Where an insurer is in administration, at least 70% of its entire business in the preceding 3 years
must relate to Irish situate risk in order to gain access to the Fund. Payments out of the Fund are
capped at 65% of the sum due to the policyholder or €825,000 whichever is the less. Health,
dental and life policies are excluded from the scope of the Fund.
How are groups supervised, if at all?12.
Where an Irish-authorised (re)insurer is a member of a wider insurance group, the group is
subject to group supervision in accordance with the Solvency II regime. The provisions relating to
group supervision are quite complex, as supervision is required of the group’s solvency,
governance and reporting obligations. The level of group supervision by the Central Bank will
depend on the location of the ultimate insurance parent and the Solvency II regime permits the
application of a tailored-approach by the local regulator in respect of group supervision.
Where a group is made up of several EEA insurers, one EEA regulator will act as the group
supervisor, while the local regulators are responsible for supervision of the individual entity
operating in their respective jurisdiction.
Where the ultimate insurance parent is located outside the EEA, the Central Bank is required to
ensure appropriate supervision of the worldwide group. This may be done by extending the
solvency capital requirements imposed on EEA insurers and reinsurers to non-EEA entities.
Alternatively, it is open to the Central Bank to adopt “other methods” which ensure appropriate
group supervision. Where a third-country has been recognised as having an equivalent
prudential supervisory regime to that imposed under Solvency II, the Central Bank may rely on
the supervision of the worldwide group by the relevant third-country regulator.

11. Do senior managers have to meet fit and proper requirements13.
and/or be approved?
The Central Bank has the power to designate certain positions within a regulated firm as being
Pre-approval Controlled Functions (“PCFs”). The main implication is that a person in a PCF role
needs to comply on an ongoing basis with the Fitness and Probity Standards issued by the
Central Bank. The PCF will need to confirm this in writing annually. Also there is an obligation
PCFs to inform the Central Bank of breaches of financial services law which may be of interest to
the Central Bank – this obligation is set out in the Central Bank (Supervision and Enforcement)
Act 2013.
The approval of the Central Bank must be sought prior to appointing a person to act as a PCF. In
summary, a PCF is a function through which a person may exercise a significant influence on the
conduct of a regulated financial service provider’s affairs. Therefore, as part of the Central
Bank’s Fitness and Probity regime, all proposed directors and senior management will have to
apply to the Central Bank for prior approval.
In order to comply with the Central Bank’s Fitness and Probity standards a person is required to
be:
competent and capable;
honest, ethical and act with integrity; and
financially sound.
For the purposes of considering whether or not to approve a person to carry on a PCF, the
Central Bank has a broad range of powers and in particular may request that the person or an
individual on behalf of the undertaking provide certain specified information to it. The person
may also be required to attend before a specified officer or employee of the Central Bank for an
interview. This is to ensure that the undertaking has the necessary people, skills, processes and
structures to successfully manage its insurance or reinsurance business. This includes, in
particular, close scrutiny of the undertaking’s management structures, board and senior
management appointments, key committees and key statutory roles.
With effect from 3 January 2018, the Minimum Competency Code 2017 (the “MCC”) (as attached)
and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48 (1) Minimum
Competency Regulations 2017 (the “Minimum Competency Regulations 2017”) together
replaced the existing Minimum Competency Code 2011. The MCC and the Minimum Competency
Regulations 2017 is closely linked to the Fitness and Probity regime.

12. Parts 1 and 2 of the MCC specifies certain minimum competency standards with which persons
falling within its scope must comply when performing controlled functions and/or providing
certain financial services, in particular when dealing with consumers. Part 3 of the MCC sets out
details on the recognition of qualifications in respect of retail financial products for the purposes
of the code. The aim is to ensure that consumers obtain a minimum acceptable level of
competence from individuals acting for and on behalf of regulated firms in the provision of
advice and information and associated activities in connection with retail financial products. The
Minimum Competency Regulations 2017 are associated with the MCC and impose certain
obligations on regulated firms.
Persons are expected to comply with the letter and spirit of the MCC. Any right acquired or
obligation or liability incurred, in respect of a contravention of, or act of misconduct under, the
previous Minimum Competency Code 2011 survives the replacement of the previous Minimum
Competency Code 2011 with the MCC and the Minimum Competency Regulations.
Please note that compliance with the MCC where applicable is one of a number of considerations
which may be taken into account in deciding whether a person is of such Fitness and Probity as
is appropriate to the performance of a controlled function within the meaning of Part 3 of the
Central Bank Reform Act 2010.
Are there restrictions on outsourcing parts of the business?14.
The 2015 Regulations permit (re)insurers to outsource many of its functions to a third party
service provider or otherwise, provided that a written outsourcing agreement is put in place and
the (re)insurer maintains proper oversight and supervision of the outsource service provider.
Where the outsourced activity constitutes a critical and important function of an insurance
undertaking, the Central Bank must be notified before outsourcing the activity and is also
required to be informed of any subsequent material developments with respect to any such
function or activity. Critical or important functions are defined by EIOPA as those that are
‘essential to the operation of the undertaking as it would be unable to deliver its services to
policyholders without the function or activity’.
Insurance undertakings are required to have written outsourcing policies in place which clearly
define the duties and responsibilities of both parties. In addition, an outsourcing agreement must
ensure effective access for the insurer, its external auditor and the Central Bank to all
information on the outsourced functions and activities and provide permission to conduct on-site
inspections. Any outsourcing must not:

13. materially impair the undertaking’s system of governance;
cause an undue increase in operational risk;
impair the supervisory monitoring of compliance with obligations; or
undermine the continuous and satisfactory service to policyholders.
While an insurer can outsource freely to an entity located in another EU / EEA Member State, the
Central Bank has been reluctant in the past to authorise an undertaking which plans to outsource
a large proportion of its activities to a third country.
How are sales of insurance supervised or controlled?15.
All insurance undertakings are required to comply with the general good requirements, which
regulate the manner in which insurance undertakings may sell and market insurance products to
consumers in Ireland. These general good requirements for the sale of insurance are set out in
the:
(a) Central Bank’s Consumer Protection Code 2012 (published by the Central Bank);
(b) Consumer Protection Act 2007;
(c) Sale of Goods and Supply of Services Act 1980;
(d) European Communities (Unfair Terms in Consumer Contracts) Regulations 1995; and
(e) European Communities (Distance Marketing of Consumer Financial Services) Regulations
2004.
Where these requirements are not complied with, entities and their management should expect
vigorous investigation and enforcement action by the Central Bank.
Are consumer policies subject to restrictions? If so, briefly16.
describe the range of protections offered to consumer
policyholders.
Consumer policies are not subject to any particular restrictions by the Central Bank. However,

14. there are a broad range of protections afforded to consumers of financial products under the
Consumer Protection Code (the “CPC”). The CPC applies to financial services providers regulated
either by the Central Bank or by a regulator in another EU or EEA Member State, when providing
services to consumers in Ireland on a freedom of establishment or freedom of services basis.
Under the CPC, regulated entities are required to act honestly, fairly, and in the best interests of
the consumer and the integrity of the market. Firms are obliged to obtain certain information
from a consumer prior to providing a product or service, in order to assess the suitability of a
product for the individual consumer. This includes information on the consumer’s needs and
objectives, personal circumstances, financial situation and where relevant attitude to risk. The
CPC also sets out the obligations on financial service firms when dealing with consumers in
respect of advertising, contacting consumers, claims processing, handling of errors and
complaints, maintaining records and providing information on products. In addition, regulated
entities are required to disclose certain information to consumers in respect of conflicts of
interest and any remuneration arrangements in place.
Consumer policies are strongly protected under the CPC and regulated entities may be subject to
administrative sanctions by the Central Bank for any failure to comply with its provisions.
Are the courts adept at handling complex commercial claims?17.
Yes. In Ireland, the jurisdiction in which court proceedings are brought depends on the monetary
value of the claim. Claims with a monetary value in excess of €75,000 are heard by the High
Court which has an unlimited monetary jurisdiction.
The High Court has a specialist court, the Commercial Court, which deals exclusively with
commercial disputes. Proceedings are case-managed and tend to move at a much quicker pace
than general High Court cases, time from entry into the list to full hearing varies between 1 week
to 4 months depending on the time required for hearing. Entry to the list is at the discretion of
the judge and may be refused if there has been any delay. Insurance and reinsurance disputes
can be heard in the Commercial Court if:
The value of the claim or counterclaim exceeds €1,000,000; and
The court considers that the dispute is inherently commercial in nature.
The Commercial Court judges place a strong emphasis on mediation and the Commercial Court
Rules provide for up to a four-week stay of proceedings to allow the parties to consider
mediation.

15. Is alternative dispute resolution well established in the18.
jurisdiction?
Yes.
Mediation
Mediation is the most common form of dispute resolution in Ireland and since the introduction of
the Mediation Act 2017 on 1 January 2018, solicitors are required to advise their clients of the
merits of mediation as an alternative dispute resolution method in advance of issuing court
proceedings. In addition, in order to issue proceedings, the Act requires the solicitor to swear a
statutory declaration confirming that such advice has been provided and this declaration must
now be filed with the originating document in the relevant court office when issuing proceedings.
The courts cannot compel the parties to mediate disputes; however, in the High Court and Circuit
Court, a judge may adjourn legal proceedings on application by either party to the action, or of
its own initiative, to allow the parties to engage in an ADR process. When the parties decide to
use the ADR process, the court rules provide that the courts may extend the time for compliance
with any provision of the rules. A party failing to mediate following a direction of the court can be
penalised as to costs.
Arbitration
If an insurance contract contains an arbitration clause, the dispute must be referred to
arbitration. However, there is an exception for consumers, who are not bound by an arbitration
clause in an insurance policy if the claim is less than €5,000 and the relevant policy has not been
individually negotiated.
Since 8 June 2010 the Arbitration Act 2010 (2010 Act) has applied the United Nations
Commission on International Trade Law (UNCITRAL) Model Law to all Irish arbitrations. The 2010
Act brought increased finality to the arbitral process by reducing the scope for court intervention
or oversight and providing a more limited basis for appealing awards and decisions than was
previously available.
The High Court has powers for granting interim measures of protection and assistance in the
taking of evidence, although most interim measures may now also be granted by the arbitral
tribunal under the 2010 Act. Once an arbitrator is appointed and the parties agree to refer their
dispute for the arbitrator’s decision, then the jurisdiction for the dispute effectively passes from
the court to the arbitrator.

16. A contract that does not contain a written arbitration agreement is not arbitrable and is
specifically excluded from the application of the 2010 Act. The arbitration agreement must be in
writing whether by way of a clause in the substantive contract or by way of separate agreement.
While Section 2(2) of the 2010 Act stipulates that such clauses should be in writing, this provision
has been given a broad interpretation to include an agreement concluded orally or by conduct as
long as its content has been recorded in writing.
Article 34 of the 2010 Act deals with applications to the court for setting aside an award. The
grounds on which a court can set aside an award are extremely limited and correspond with
those contained in Article V of the New York Convention, which requires the party making the
application to furnish proof that:
(a) a party to the arbitration agreement was under some incapacity or the agreement itself was
invalid;
(b) the party making the application was not given proper notice of the appointment of the
arbitrator or of the arbitral proceedings or was otherwise unable to present his or her case;
(c) the award deals with a dispute not falling within the ambit of the arbitration agreement;
(d) the arbitral tribunal was not properly constituted; or
(e) the award is in conflict with the public policy of the state.
What are the primary challenges to new market entrants?19.
The Central Bank requires the substance and “heart and mind” of an Irish-authorised insurance
undertaking to be maintained in Ireland in order to ensure compliance with all applicable legal
and regulatory requirements. As such, the primary challenge facing insurers and reinsurers
seeking to establish in Ireland is demonstrating real substance. In considering an application for
authorisation, the Central Bank will need to be satisfied that the key personnel responsible for
the strategic decision making of the undertaking will be located in Ireland. There are no
guidelines in terms of the specific numbers required by the Central Bank, as this will generally
depend on the nature, scale and complexity of the business.
To what extent is the market being challenged by digital20.

17. innovation?
In many ways, digital innovation has yet to come to the fore in the insurance market. However,
the challenges created by such innovation are increasingly relevant. The growing sophistication
of digital technology gives rise to cyber-security threats and risk of data breaches. The nature of
the insurance market itself is also being challenged by digital innovation. We are seeing an
increasing trend towards risk prevention rather than insuring against risk. Advanced technology
has created safer cars and smarter devices which can prevent household damage, thereby
mitigating risk and reducing premiums. Insurers will have to adapt to the technological needs of
the market or risk being left behind.
In order to rise to the challenges created by digital innovation, insurers must seek to create
innovative products, which protect against data loss or cyber damage. In addition, the
introduction of automation into the workplace will change the nature of many roles in the
insurance industry and the market will have to adapt by reducing administrative and operational
support, in favour of skilled resources such as analytics and software development.
Driverless cars / autonomous vehicles present particular challenges for the motor insurance
industry. The existing driver-centred Irish legislative framework will need to be updated to
facilitate driverless cars on Irish roads. The UK has proposed a single insurer model for driverless
cars, where both the driver and the driverless technology are insured under one policy. While
this has not yet been considered by the Irish legislature in any meaningful way, it can be
anticipated that the Irish legislature is likely to follow the UK approach, given similarities
between the existing road traffic frameworks in both countries.
Over the next five years what type of business do you see taking21.
a market lead?
Emerging technologies and risks
The market for cyber insurance is growing and is seen as one of the biggest growth areas in the
insurance industry globally. According to industry data, the global cyber market was estimated
to be worth around $4.3bn in premiums in 2017. Fitch believes cyber insurance premiums could
increase to $20bn by 2020.
Cyber insurance is still a relatively new product on the Irish market however it has become more
popular in recent times and a number of insurers are now offering new cyber products in Ireland
as a result. It has become a board issue in anticipation of the introduction of GDPR on 25 May
2018 and following a number of high profile cyber-attacks in recent years. It is expected that
cyber will be a growth area in Ireland in the coming years.

18. In our view, the market leaders over the next five years will be those insurance companies that
branch away from the traditional insurance business model towards a more technology-friendly
operating model. In today’s digital economy, consumers want instant access to relevant and
simplified information and this extends to complex insurance products. Embracing the benefits
that technological advances can offer to the design and distribution of innovative insurance
products will enable progressive companies to meet the needs and expectations of consumers in
a more effective and efficient manner.
Drones are an emerging and rapidly developing technology, and new legislation is proposed in
Ireland to increase existing drone regulation and impose criminal liability for certain drone
offences. The draft bill (the Small Unmanned Aircraft (Drones) Bill 2017) imposes an obligation
on commercial drone operators to have insurance for any liability arising from drone operation,
including potential collision with persons or property, and it will be a criminal offence to operate
a drone for commercial use without insurance. There is no clear timeline for the implementation
of this Bill. As this market continues to grow, it seems inevitable that drone insurance will be a
growth area.
Driverless cars and autonomous vehicles present particular challenges for the motor insurance
industry. The existing driver-centred Irish legislative framework will need to be updated to
facilitate driverless cars on Irish roads. The UK has proposed a single insurer model for driverless
cars, where both the driver and the driverless technology are insured under one policy. While
this has not yet been considered by the Irish legislature in any meaningful way, it can be
anticipated that the Irish legislature is likely to follow the UK approach, given similarities
between the existing road traffic frameworks in both countries.
Developments in M&A
Compared to 2017 levels, we anticipate further increases in the levels of insurance industry M&A
activity in 2018. While the lack of clarity about specific proposals under Brexit and the proposed
changes to the US financial services industry regulations and tax code may be a short-term
inhibitor of insurance M&A, once clear, some of the changes may drive increased deal-making as
the year progresses.
Developments related to third-party funding
In May 2017, the Irish Supreme Court confirmed in its decision in Persona Digital Telephony Ltd &
Another v. Minister for Public Enterprise that third-party funding of litigation is unlawful, and
indicated that any changes to the law in this regard in Ireland would be a matter for the
legislature, not the courts. However, the Irish High Court has previously made clear that after-
the-event insurance is valid; therefore, post-Persona Digital, ATE insurance is the only valid third-
party funding in this jurisdiction.

19. UK Insurance Act 2015
Following implementation of the Insurance Act 2015 in the UK in August 2016, insurance law in
Ireland is now significantly different from the UK law for the first time since 1906. We anticipate
that the implementation of the Act will have an impact on the Irish insurance industry as the Irish
market is closely connected to the UK (in particular the London market) and many Irish risks are
written subject to English law. However the significance of this impact remains to be seen.
Payment protection insurance (PPI)
Following the UK Supreme Court decision in Plevin, a further redress scheme in respect of PPI is
underway in the UK. It is possible, particularly in light of the changes to the limitation period for
claims to the Financial Services and Pensions Ombudsman in relation to long-term financial
products, that there could be further litigation in relation to the sale of PPI in Ireland.