Development of insurance regulation in Ireland

Abstract

PurposeThe purpose of this paper is to chart the chronology of insurance regulation in Ireland and evaluate the integration within European Union directives.Design/methodology/approachThe approach used was to chart the development of insurance regulation in Ireland and establish the stakeholders in the insurance industry that are affected by regulation. The various aspects of the EU involvement in regulation were also listed.FindingsIreland is one of the few countries that has a single financial regulator that is the Central (Reserve) Bank. The Central Bank is recognised as the Irish national regulator for all insurance activities in the EU and with that carries responsibility for implementing EU directives. In comparing other regulatory systems, there is a mixture of direct government involvement, sector specific regulation, financial services regulation and Central Bank acting as regulator.Research limitations/implicationsResearch is based on literature review and data obtained from the EU regarding national regulators. It does not set a standard of regulation or compare different regulators but establishes the different forms of regulation in Ireland and the EU.Practical implicationsThe paper establishes Ireland's insurance regulatory environment amongst its European peers. It also charts the development of insurance regulation from solvency to the current model of solvency and consumer protection with the other offices of Financial Services Ombudsman.Originality/valueThe paper is based on research based on literature review and data obtained from the EU regarding national regulators.

Will Brexit affect the insurance industry? An Irish study

“…Insurance regulation in Ireland changed dramatically in the late 1990s; where it was once performed by a government department, it was then delegated to the reserve bank of the country, resulting in a unified regulator for all financial services for the country (Brophy, 2012). With the creation of the internal market, creating (1) freedom of establishment, (2) freedom of service and (3) single licence -home country control and deregulation of supervision (Swiss Re, 1996) the Central Bank is the recognised Irish regulator for insurance companies headquartered in Ireland that operate throughout the EU.…”

“…While Dublin and Ireland may not be seen as the destination for financial services, its corporate environmental factors have contributed to many insurers choosing to base their operations in Ireland (Greenford et al, 2007). Ireland hosts a significant number of captive insurers (insurers created by large corporations to self-insure) alongside other jurisdictions such as Luxembourg and Malta (Brophy, 2012).…”

Novel approaches to the regulatory control of financial services providers: The importance of cultural context

“…We also contribute to the sparse literature on the role of the financial ombudsman. Specifically, while there are some studies which chart the evolution of the legal framework around the oversight of FSPs in common law and EU settings and the sometimes tension between financial ombudsman and the judiciary (Abraham, 2008a(Abraham, , 2008bBrophy, R., 2012;Hertogh, 1998;Thomas, 2001;Merricks, 2007;Stewart and McNally, 2014), the literature is silent on the effectiveness of financial ombudsmen. Finally, our paper adds to the emerging literature on the efficacy of regulatory disclosure within the context of responsive regulation and smart financial governance approaches which combined hard and soft powers (Bardach and Kagan 1982;Gunningham, Grabosky and Sinclair, 1998;Gunnignham, Kagan and Thornton, 2004;Braithwaite 2008;Van Erp, 2010).…”

Financial services education

“…There are two bodies that concentrate on consumer protection providing public information, namely, the Financial Services Ombudsman and the National Consumer Agency (Brophy, 2012). As regulation moves from ensuring the solvency of a financial provider to ensuring consumer protection, the regulators are also looking at other ways to enhance consumer protection by examining the transactional processes involved in the purchase of financial products.…”