Pre-emptive Recovery Planning requirements for (Re) Insurers has been saved
Pre-emptive Recovery Planning requirements for (Re) Insurers
Finalisation and Publication of Regulations by the Central Bank of Ireland
In 2020 the Central Bank launched a consultation on the proposed introduction of regulations and guidelines relating to pre-emptive Recovery Planning requirements for (Re) Insurers.
The consultation, which closed in October of last year, was a proactive step by the Central Bank – in advance of anticipated European developments - to implement a strong prudential framework which (broadly) aligns with existing Recovery Plan frameworks for banks and investment firms operating in Ireland.
The Central Bank on 27 April 2021 published its feedback statement on the consultation and confirmed the finalisation and publication of Regulations1. The Regulations were published on 27 April 2021 and the deadline for preparation of a recovery plan is 31 March 2022 (or within 12 months of authorisation where the (re)insurer is newly authorised on or after the date on which the Regulations come into operation). The Regulations also establish review cycles for Recovery Plans, primarily driven by PRISM impact ratings. The Central Bank has also published accompanying guidance2 setting out the expectations of the Central Bank to ensure that the Recovery Plan is appropriate to the nature, scale and complexity of the insurer.
We will be publishing a detailed analysis and impact assessment of the new Regulations (and potential for further Irish or European guidelines) shortly. In particular, we will focus on the regulatory and practical consequences for Boards, senior management teams and internal control functions, as well as risk management and internal governance frameworks.
To read our previous 2020 paper on Recovery Planning for (Re)Insurers: A new regulatory landscape please click here.
1: Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Recovery Plan Requirements for Insurers) Regulations 2021 – Regulations requiring Recovery Plans for (Re)insurers published (centralbank.ie)