Recovery Planning for (Re) Insurers has been saved
Recovery Planning for (Re) Insurers
Getting ready for the new regulatory framework
In 2020 the Central Bank launched a consultation on the proposed introduction of regulations and guidelines relating to pre-emptive Recovery Planning requirements for insurance firms.
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 this
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 insurance firm 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.
The regulations will have a material impact on insurance firms operating in Ireland, with implications for risk management frameworks, solvency and liquidity planning, governance structures and senior executive and Board member responsibilities and accountabilities. The new framework can be seen as a precursor to a harmonised European Recovery (and Resolution) Planning regime.
- Provides an overview of the requirements and changes from consultation phase,
- Outlines key impacts and considerations for insurers, and
- Highlights some of the core challenges arising for (re)insurers.
Please click here to read the full report.