Insurance Ireland Calls for Regulatory ‘Grandfathering’ of UK Regulated Insurers Looking to Locate in Ireland
CEO Kevin Thompson: “This is a workable solution to manage the downside effects of Brexit and avail of any potential upside effects”
Proposal is in accordance with Solvency II, the European Union Directive that harmonises insurance regulation
Issued 4th May 2017. In advance of the attendance of its CEO Kevin Thompson at the Seanad hearings on Brexit today, Insurance Ireland has called for regulatory grandfathering* of UK-based insurers to assist those looking to invest in Ireland post-Brexit.
In a submission made to the Seanad Special Select Committee on the UK’s Withdrawal from the European Union, Kevin Thompson stated that Brexit must be seen in the context of keeping existing jobs as much as it is about gaining new jobs. This is vital in an international investment environment where the credibility and attractiveness of a location is determined by the companies in the market.
To ensure Ireland’s status as an international hub for insurance is protected, and any new investments are availed of, Insurance Ireland is calling for regulatory grandfathering of UK-based insurers. This would give an insurer regulated by the Prudential Regulation Authority (PRA), with a good record, a credit in the approval process which would enable them to trade in Ireland on a similar basis as their current circumstances in the UK.
In addition, Insurance Ireland believe a regulatory corridor (a joint grandfathering agreement) should be established between the Central Bank of Ireland and the PRA to allow for rapid approval of Irish entities who are seeking to export their services to the UK.
Kevin Thompson stated “Within Europe, Insurance has developed into a single market for providers and Ireland has benefitted greatly by developing into an international hub which both complements and competes with the UK market. Irish-based entities had gross premium income of €51 billion in 2015 and this underscores the need to maintain the industry’s access arrangements and attractiveness to investors.”
Kevin concluded “Regulatory grandfathering would recognise the interconnectedness of the Irish and UK insurance markets and would also be in accordance with Solvency II, the EU directive which harmonises EU insurance regulation. Insurance Ireland is making this proposal to the Seanad hearings as a workable solution to manage the downside effects of Brexit and avail of any potential upside effects.”
Notes for Editors:
· Insurance Ireland members pay €1.8 billion in tax and one in four jobs in financial services are in insurance
· Total employment in the insurance industry in Ireland is approximately 28,000 both directly and indirectly
· Insurance Ireland members pay out more than €13 billion in claims and benefits to Irish customers each year
· Gross premium income for the Insurance Ireland membership was €51 billion in 2015
· The insurance industry holds €200 billion in assets under management with €35 billion invested in Irish infrastructure and Government debt
· The Solvency II Directive (2009/138/EC) is a Directive in European Union law that codifies and harmonises EU insurance regulation. Primarily this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency.
· Regulatory Grandfathering is a mechanism for fast-tracking a regulatory approval process by recognising a business’s record in a comparable regulatory jurisdiction and the approval process a firm would have gone through in that jurisdiction.
Communications Manager, Insurance Ireland
Tel: (+353) 01 644 7781 / 087 938 3852
Q4 Public Relations
Tel: 01 475 1444 / 085 174 4275