S.I. No. 229/2018 - European Union (Insurance Distribution) Regulations 2018

CONTENTS

Regulation

Part 1 Preliminary and general

1.

2.

3.

Part 2 Competent Authority

4.

5.

Part 3 Registration requirements

6.

7.

8.

9.

10.

11.

12.

13.

14.

Part 4 Freedom to provide services and freedom of establishment

15.

16.

17.

18.

19.

Part 5 Organisational Requirements

20.

21.

22.

Part 6 Cooperation with Member States

23.

24.

25.

26.

27.

28.

29.

PART 7 Information requirements and conduct of business rules

Chapter 1 Information

30.

31.

32.

33.

34.

35.

36.

37.

38.

Chapter 2 Additional requirements in relation to insurance-based investment products

39.

40.

41.

42.

43.

Part 8 Sanctions and other measures

44.

45.

46.

47.

48.

49.

50.

51.

Part 9 Publication

52.

Part 10 Arrangements for Reporting of Breaches

53.

Part 11 Consequential Amendments

54.

55.

Part 12 Offences

56.

57.

58.

59.

Part 13 Repeals and Transitionals

60.

61.

SCHEDULE Minimum Professional Knowledge and Competence Requirements

S.I. No. 229 of 2018

EUROPEAN UNION (INSURANCE DISTRIBUTION) REGULATIONS 2018

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 3rd July, 2018.

I, PASCHAL DONOHOE, Minister for Finance, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive (EU) 2016/97¹ of the European Parliament and of the Council of 20 January 2016 on insurance distribution, hereby make the following regulations:

Part 1 Preliminary and general

Citation and commencement

• (2) These Regulations shall come into operation on 1 October 2018.

Interpretation

“Act of 1942” means the Central Bank Act 1942 (No. 22 of 1942);

“Act of 1995” means the Investment Intermediaries Act 1995 (No. 11 of 1995);

“Act of 2013” means the Central Bank (Supervision and Enforcement) Act 2013 (No. 26 of 2013);

“advice” means the provision of a personal recommendation to a customer, either upon their request or at the initiative of the insurance distributor, in respect of one or more insurance contracts;

“ancillary insurance intermediary” means a person, other than a credit institution or an investment firm as defined in points (1) and (2) of Article 4(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013² who, for remuneration, takes up or pursues the activity of insurance distribution on an ancillary basis, provided that all the following conditions are met:

• (a) the principal professional activity of that person is other than insurance distribution;

• (b) the person only distributes certain insurance products that are complementary to a good or service;

• (c) the insurance products concerned do not cover life assurance or liability risks, unless that cover complements the good or service which the intermediary provides as its principal professional activity;

“approved professional body” means a body approved under section 56 of the Act of 1995;

“authorised officer” means a person appointed under section 24 of the Act of 2013;

“Bank” means the Central Bank of Ireland;

“branch” means an agency or a branch of an insurance intermediary, ancillary insurance intermediary or a reinsurance intermediary, which is located in the territory of a Member State other than the home Member State, and any permanent presence of an intermediary in a Member State other than its home Member State shall be treated in the same way as a branch, even where that presence does not take the form of a branch but consists merely of an office managed by the staff of the intermediary or by a person who is independent but has permanent authority to act for the intermediary as an agency would;

“close links” has the same meaning as in the Regulations of 2015;

“Commission” means the European Commission;

“Directive 2009/138/EC” means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009³ on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II);

“Directive of 2016” means Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 20161 on insurance distribution;

“durable medium” means any instrument which—

• (a) allows a customer to store information addressed personally to the customer in a way that renders it accessible for future reference and for a period of time adequate for the purposes of the information, and

• (b) allows the unchanged reproduction of the information stored;

“EIOPA” means the European Insurance and Occupational Pensions Authority;

“general good rules” has the meaning given to it in Regulation 5;

“home Member State” means—

• (a) where the intermediary is a natural person, the Member State in which his or her residence is situated, or

• (b) where the intermediary is a legal person, the Member State in which its registered office is situated or, if under its national law it has no registered office, the Member State in which its head office is situated;

“host Member State” means the Member State, other than the home Member State, in which an insurance, reinsurance or ancillary insurance intermediary—

• (a) has a permanent presence or establishment, or

• (b) provides services;

“insurance-based investment product” means an insurance product which offers a maturity or surrender value, where that maturity or surrender value is wholly or partially exposed, directly or indirectly, to market fluctuations, and does not include the following:

• (a) non-life insurance products as listed in Annex I to Directive 2009/138/EC (Classes of non-life insurance);

• (b) life insurance contracts where the benefits under the contract are payable only on death or in respect of incapacity due to injury, sickness or disability;

• (c) pension products which, under national law, are recognised as having the primary purpose of providing the investor with an income in retirement, and which entitle the investor to certain benefits;

• (d) officially recognised occupational pension schemes falling under the scope of—

• (i) Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003⁴ , or

• (ii) Directive 2009/138/EC;

• (e) individual pension products for which a financial contribution from the employer is required by national law and where the employer or the employee has no choice as to the pension product or provider;

“insurance distribution” means any activity involved in advising on, proposing, or carrying out other work preparatory to the conclusion of contracts of insurance, of concluding such contracts, or of assisting in the administration and performance of such contracts, in particular in the event of a claim, including the provision of information concerning one or more insurance contracts in accordance with criteria selected by customers through a website or other media and the compilation of an insurance product ranking list, including price and product comparison, or a discount on the price of an insurance contract, when the customer is able to directly or indirectly conclude an insurance contract using a website or other media; but does not include the following:

• (a) the provision of information on an incidental basis in the context of another professional activity where—

• (i) the provider does not take any additional steps to assist in concluding or performing an insurance contract, or

• (ii) the purpose of that activity is not to assist the customer in concluding or performing a reinsurance contract;

• (b) the management of claims of an insurance undertaking or of a reinsurance undertaking on a professional basis, and loss adjusting and expert appraisal of claims;

• (c) the mere provision of data and information on potential policyholders to insurance intermediaries, reinsurance intermediaries, insurance undertakings or reinsurance undertakings where the provider does not take any additional steps to assist in the conclusion of an insurance or reinsurance contract;

• (d) the mere provision of information about insurance or reinsurance products, an insurance intermediary, a reinsurance intermediary, an insurance undertaking or a reinsurance undertaking to potential policyholders where the provider does not take any additional steps to assist in the conclusion of an insurance or reinsurance contract;

“insurance distributor” means any insurance intermediary, ancillary insurance intermediary or insurance undertaking;

“insurance intermediary” means any person, other than an insurance or reinsurance undertaking or their employees and other than an ancillary insurance intermediary, who, for remuneration, takes up or pursues the activity of insurance distribution;

“Insurance Mediation Regulations” means the European Communities (Insurance Mediation) Regulations 2005 ( S.I. No. 13 of 2005 );

“insurance undertaking” has the same meaning as in the Regulations of 2015;

“large risks” has the same meaning as in the Regulations of 2015;

“Member State” means Member State of the European Union and, where relevant, includes a contracting party to the Agreement on the European Economic Area signed at Oporto on 2 May 1992 (as adjusted by the Protocol signed at Brussels on 17 March 1993), as amended;

“Minister” means the Minister for Finance;

“primary place of business” means the location from where the main business of an insurance distributor is managed;

“qualifying holding” means a direct or indirect holding of shares or other interest in an insurance, reinsurance or ancillary insurance intermediary—

• (a) which represents 10 per cent or more of the capital or the voting rights, or

• (b) which represents less than 10 per cent of the capital or voting rights but which, in the opinion of the Bank, makes it possible to control or exercise a significant influence over the management of the insurance, reinsurance or ancillary insurance intermediary concerned;

“Regulation (EU) No 1094/2010” means Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010⁵ ;

“Regulations of 2015” means the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 );

“reinsurance distribution” means any activity involved in advising on, proposing, or carrying out other work preparatory to the conclusion of contracts of reinsurance, of concluding such contracts, or of assisting in the administration and performance of such contracts, in particular in the event of a claim, including when carried out by a reinsurance undertaking without the intervention of a reinsurance intermediary, but does not include the following:

• (a) the provision of information on an incidental basis in the context of another professional activity where—

• (i) the provider does not take any additional steps to assist in concluding or performing an insurance contract, or

• (ii) the purpose of that activity is not to assist the customer in concluding or performing a reinsurance contract;

• (b) the management of claims of an insurance undertaking or of a reinsurance undertaking on a professional basis, and loss adjusting and expert appraisal of claims;

• (c) the mere provision of data and information on potential policyholders to insurance intermediaries, reinsurance intermediaries, insurance undertakings or reinsurance undertakings where the provider does not take any additional steps to assist in the conclusion of an insurance or reinsurance contract;

• (d) the mere provision of information about insurance or reinsurance products, an insurance intermediary, a reinsurance intermediary, an insurance undertaking or a reinsurance undertaking to potential policyholders where the provider does not take any additional steps to assist in the conclusion of an insurance or reinsurance contract;

“reinsurance distributor” means any reinsurance intermediary or reinsurance undertaking;

“reinsurance intermediary” means any person, other than a reinsurance undertaking or its employees, who, for remuneration, takes up or pursues the activity of reinsurance distribution;

“reinsurance undertaking” has the same meaning as in the Regulations of 2015;

“remuneration” means any commission, fee, charge or other payment, including an economic benefit of any kind or any other financial or non-financial advantage or incentive offered or given in respect of insurance or reinsurance distribution activities.

• (2) A word or expression that is used in these Regulations and is also used in the Directive of 2016 shall, unless the context otherwise requires, have the same meaning in these Regulations that it has in that Directive.

Scope

• (2) Subject to paragraph (3), these Regulations shall not apply to ancillary insurance intermediaries carrying out insurance distribution activities where—

• (a) the insurance is complementary to the good or service supplied by a provider, where such insurance covers—

• (i) the risk of breakdown, loss of, or damage to, the good or the non-use of the service supplied by that provider, or

• (ii) damage to, or loss of, baggage and other risks linked to travel booked with that provider,

and

• (b) the amount of the premium paid for the insurance product does not exceed €600 calculated on a pro rata annual basis or, where the duration of that service is equal to, or less than, 3 months, the amount of the premium paid per person does not exceed €200.

• (3) An insurance undertaking or insurance intermediary distributing insurance through an ancillary insurance intermediary exempt from the application of these Regulations in accordance with paragraph (2) shall ensure that the ancillary insurance intermediary—

• (a) informs the customer, prior to the conclusion of the contract, about the identity, address and complaints procedures of the insurance undertaking or insurance intermediary concerned,

• (b) has in place appropriate and proportionate arrangements to comply with Regulations 30 and 37 and to consider the demands and needs of the customer before the proposal of the contract, and

• (c) provides the customer with the insurance product information document referred to in Regulation 34(6) prior to the conclusion of the contract.

• (4) These Regulations do not apply to or in respect of—

• (a) insurance and reinsurance distribution services provided in relation to risks and commitments arising in a country other than a Member State, or

• (b) insurance and reinsurance distribution activities carried out in third countries.

• (5) These Regulations do not affect the law of the State relating to insurance and reinsurance distribution undertaken by insurance and reinsurance distributors established in a third country and operating within the State under the principle of freedom to provide services, so long as equal treatment is guaranteed to all persons carrying out or authorised to carry out insurance and reinsurance distribution activities in the State.

(6)(a) As soon as practicable after becoming aware that an insurance or reinsurance distributor is encountering difficulties in establishing itself or carrying out insurance or reinsurance distribution activities in a third country, the Bank shall notify those difficulties to the Minister.

• (b) The Minister shall, without delay, inform the Commission and EIOPA of any difficulties notified to him or her in accordance with subparagraph (a).

• (7) The Bank shall monitor the insurance market, including the market for ancillary insurance products which are marketed, distributed or sold in, or from, the State.

Part 2 Competent Authority

Competent authority

• (2) The Bank is designated as the single point of contact responsible for providing information on general good rules for the purpose of these Regulations and the Directive of 2016.

• (3) Insurance or reinsurance distributors, or approved professional bodies, may cooperate with the Bank in accordance with Regulation 9(6).

General good rules

• (2) The Bank shall ensure that the administrative burden stemming from the general good rules is proportionate and shall update and monitor, on a regular basis, the general good rules to ensure they remain in conformity with this Regulation.

• (3) The Bank shall have the power, where strictly necessary, to take appropriate and non-discriminatory measures to penalise irregularities committed in the State which are contrary to their general good rules, including the possibility of preventing the insurance, reinsurance or ancillary insurance intermediary concerned from carrying out new business in the State.

• (4) The Bank, after informing the competent authority of the home Member State, shall have the power to take appropriate measures to prevent an insurance distributor established in that other Member State from carrying out activity in the State under the freedom to provide services or, where applicable, the freedom of establishment, where—

• (a) the relevant activity is entirely or principally directed towards the State with the sole purpose of avoiding the legal provisions which would be applicable if that insurance distributor had its residence or registered office in the State, and

• (b) its activity seriously endangers the proper functioning of insurance and reinsurance markets in the State with respect to the protection of consumers.

• (5) Where the Bank and the competent authority of the home Member State disagree on the measures to be taken in accordance with paragraph (4), the Bank may refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

Part 3 Registration requirements

Bank to establish and maintain Insurance Distribution Register

• (2) The Bank may subdivide the Register into 2 or more registers if it thinks fit to do so.

• (3) The Register shall—

• (a) be compiled electronically and be available in a form that is readily accessible to the public, and

• (b) contain information (in this Regulation referred to as “relevant information”) relating to registered insurance intermediaries, registered ancillary insurance intermediaries and registered reinsurance intermediaries, including, in the case of those intermediaries that are companies or partnerships, the names of the persons within the management of those intermediaries that are responsible for the insurance or reinsurance distribution.

• (4) The Bank shall ensure that the Register—

• (a) specifies the Member States in which each registered insurance intermediary, each registered ancillary insurance intermediary and each registered reinsurance intermediary has notified its intention to the Bank to carry on cross-border business in accordance with Part 4, and

• (b) is kept up to date.

• (5) The Bank shall provide the relevant information to EIOPA to enable EIOPA to establish, publish on its website and keep up-to-date a single electronic register containing records of insurance, reinsurance and ancillary insurance intermediaries which have notified their intention to the Bank to carry on cross-border business in accordance with Regulations 15 and 17.

Bank to establish online registration system

• (a) is easily accessible to the public generally, and

• (b) allows completion of the registration form directly online.

Registration of persons already registered or authorised to carry out insurance or reinsurance activities

• (2) Subject to paragraph (3), a person who—

• (a) is a certified person who has been deemed an authorised investment business firm in accordance with section 63 of the Act of 1995,

• (b) is carrying out insurance distribution activities, and

• (c) has not been registered as an insurance intermediary under the Insurance Mediation Regulations,

is not required to comply with Regulation 57.

• (3) Paragraph (2) shall only apply—

• (a) where a certified person referred to in that paragraph submits an application for registration for the purposes of Regulation 9 on or before 30 September 2018, and

• (b) until such time as the Bank determines whether to grant or refuse the application for registration in accordance with Regulation 10.

Application for registration as an insurance, reinsurance or ancillary insurance intermediary

• (a) in the case of a natural person, they are resident in the State, or

• (b) in the case of a legal person, it has its registered office in the State, or if it is not required to have a registered office, it has its head office in the State.

• (2) An application to the Bank under paragraph (1) shall—

• (a) be in a form approved by the Bank and published on its website from time to time,

• (b) contain such information and be accompanied by such documentation as the Bank requires, and

• (c) be accompanied by the fee (if any) prescribed under section 32E of the Act of 1942 for the purposes of this Regulation.

• (3) Paragraph (1) shall not apply to—

• (a) insurance undertakings and their employees,

• (b) reinsurance undertakings and their employees,

• (c) persons, activities or operations, excluded from the application of these Regulations by virtue of Regulation 3, or

• (d) the holder of a registration issued under the Insurance Mediation Regulations who is automatically registered under these Regulations by virtue of Regulation 8.

• (4) The Bank shall take all reasonably practicable measures to ensure that persons who fail to comply with paragraph (1) cease to undertake insurance distribution or reinsurance distribution within the State and within other Member States.

• (5) An insurance or reinsurance undertaking, or intermediary, which is supervised by the Bank, shall apply to register insurance, reinsurance or ancillary insurance intermediaries for which it is responsible with the Bank and shall ensure that the insurance, reinsurance or ancillary insurance intermediary concerned meets the conditions for registration set out in these Regulations.

• (6) Insurance and reinsurance undertakings and intermediaries and approved professional bodies shall, on request of the Bank, cooperate with the Bank in registering insurance and reinsurance and ancillary insurance intermediaries and in the application of the requirements set out in Regulations 20 and 21.

• (7) The Bank shall ensure that registration of insurance, reinsurance and ancillary insurance intermediaries is made subject to the fulfilment of the requirements set out in Regulations 20 and 21.

• (8) The Bank shall not grant an application for registration by an insurance, reinsurance or ancillary insurance intermediary unless the following information has been provided:

• (a) the identities of shareholders or members, whether natural or legal persons, that have a qualifying holding in the intermediary, and the amounts of those holdings;

• (b) the identities of persons who have close links with the intermediary;

• (c) information that shows that those holdings or close links do not prevent the effective exercise of the supervisory functions of the competent authority.

• (9) Insurance and reinsurance undertakings and intermediaries shall only use the insurance and reinsurance distribution services of registered insurance and reinsurance intermediaries or ancillary insurance intermediaries including those referred to in Regulation 3(2).

• (10) Nothing in this Regulation shall prevent—

• (a) a person from making applications for registration as an insurance intermediary and registration as a reinsurance intermediary, or

• (b) an intermediary from entering into a tied agency arrangement with an insurance or reinsurance undertaking or other intermediary, thereby acting as a tied insurance intermediary.

• (11) In this Regulation, “tied insurance intermediary” means any person who—

• (a) undertakes insurance or reinsurance distribution for and on behalf of one or more insurance or reinsurance undertakings or other intermediaries, in the case of insurance products that are not in competition,

• (b) acts under the responsibility of those insurance or reinsurance undertakings or other intermediaries, and

• (c) is subject to oversight of compliance with conditions for registration by the insurance or reinsurance undertaking or other intermediary on whose behalf it is acting.

Grant and refusal of applications for registration

• (2) The grant of a registration under paragraph (1) may be given unconditionally or subject to conditions or requirements other than those set out in Regulation 9(7).

• (3) The Bank may, from time to time, remove or vary the conditions or requirements referred to in paragraph (2).

• (4) On accepting a registration in respect of an application under paragraph (1), the Bank shall record the appropriate particulars of the applicant in the Register.

• (5) The Bank shall refuse to register an insurance, reinsurance or ancillary insurance intermediary if the laws, regulations or administrative provisions of a third country governing one or more of the persons with which the insurance, reinsurance or ancillary insurance intermediary has close links, or the practical difficulties involved in the enforcement of those laws, regulations or administrative provisions, prevent the effective exercise of the Bank’s supervisory functions.

• (6) The Bank may not refuse an application without giving the applicant an opportunity to make representations in writing as to why the application should not be refused.

• (7) Where the Bank refuses an application, it shall promptly give to the applicant a written notice of refusal, which shall include a statement setting out the reasons for the refusal.

• (8) The Bank shall consider applications made under these Regulations—

• (a) within 3 months after the date of receipt by the Bank of the duly completed application, or

• (b) where further information or records have been requested by the Bank in relation to the application, within 3 months after the date of receipt by the Bank of further information or records previously requested under Regulation 11.

• (9) The Bank shall inform the applicant without delay whether an application has been granted or refused.

• (10) A refusal by the Bank of an application for registration under paragraph (1), or the grant of an authorisation subject to a condition or requirement under paragraph (2), shall be an appealable decision for the purpose of Part VIIA of the Act of 1942.

Power of Bank to obtain further information

• (2) Where a request referred to in paragraph (1) is not complied with within the period specified in the notice, the Bank may reject the application.

Review of registration

• (2) The Bank shall regularly review the compliance by a registered insurance, reinsurance or ancillary insurance intermediary with its obligations under paragraph (1).

• (3) An insurance, reinsurance and ancillary insurance intermediary or, where applicable, an insurance or reinsurance undertaking, shall notify the Bank in writing without undue delay of any material change in the information provided under Regulation 9(8).

Withdrawal of registration and removal from the Register

• (2) Subject to paragraph (4), the Bank may withdraw the registration of, and remove from the Register, an insurance, reinsurance or ancillary insurance intermediary on any of the following grounds:

• (a) the intermediary has not undertaken insurance distribution or reinsurance distribution within the immediately preceding 6 months;

• (b) the registration was obtained by means of a false or misleading representation;

• (c) the intermediary has become subject to an insolvency process such as winding-up or bankruptcy;

• (d) since the intermediary was registered, the circumstances under which the registration took place have changed to the extent that an application for registration would be refused had it been made in the changed circumstances;

• (e) the intermediary, or if it is a body corporate or partnership, any person concerned in its direction or management, is convicted of—

• (i) an offence under these Regulations or under any enactment or statutory instrument specified in Part 2 of Schedule 2 to the Act of 1942, or

• (ii) an offence involving fraud, dishonesty or breach of trust;

• (f) where the Bank is satisfied that it is appropriate to do so, on the application of the intermediary concerned.

• (3) An insurance, reinsurance or ancillary insurance intermediary whose registration is withdrawn and removed from the Register under this Regulation shall not undertake insurance or reinsurance distribution.

• (4) The Bank may withdraw the registration of, and remove from the Register, an insurance, reinsurance or ancillary insurance intermediary under this Regulation only after it has, given notice in writing to the intermediary informing the intermediary of its intention to withdraw that registration.

• (5) The notice referred to in paragraph (4) shall specify—

• (a) the grounds on which it is proposed to withdraw the intermediary’s registration, and

• (b) that the intermediary may, not later than 21 calendar days after the giving of the notice make written representations to the Bank showing why the registration should not be withdrawn.

• (6) Not later than 21 calendar days after being given a notice under paragraph (4), the insurance, reinsurance or ancillary insurance intermediary concerned may make written representations to the Bank as to why the intermediary’s registration should not be withdrawn.

• (7) As soon as practicable after withdrawing the registration of an insurance, reinsurance or ancillary insurance intermediary under this Regulation, the Bank shall give written notice of the withdrawal to the intermediary.

• (8) The notice referred to in paragraph (7) shall include a statement of the reasons for the withdrawal.

• (9) The Bank may publish information on the withdrawal of the registration of an insurance, reinsurance or ancillary insurance intermediary under this Regulation in such form and manner as it thinks appropriate.

• (10) A withdrawal by the Bank of a registration in accordance with paragraph (1) or (2) shall be an appealable decision for the purpose of Part VIIA of the Act of 1942.

Consequences of withdrawal of registration under this Part as regards other Member States

Part 4 Freedom to provide services and freedom of establishment

Exercise of the freedom to provide services

• (a) the name, address and, where applicable, the registration number of the intermediary;

• (b) the host Member States in which the intermediary intends to operate;

• (c) the category of intermediary and, where applicable, the name of any insurance or reinsurance undertaking represented;

• (d) the relevant classes of insurance, if applicable.

• (2) The Bank shall, not later than one month after the date of receiving the information referred to in paragraph (1), send that information to the competent authority of the host Member State, which shall pursuant to the Directive of 2016 acknowledge its receipt without delay.

• (3) When the Bank receives an acknowledgement of receipt of the information sent in accordance with paragraph (2) from the competent authority of the host Member State, the Bank shall inform the insurance, reinsurance or ancillary insurance intermediary in writing that the information has been received by the competent authority of the host Member State and that the intermediary may begin to undertake insurance distribution or reinsurance distribution in that host Member State.

• (4) The Bank shall inform the intermediary, where applicable, that information concerning the general good rules of a host Member State is available on the EIOPA website and from the point of contact responsible for providing information on the general good rules in that host Member State and that the intermediary shall comply with those provisions in order to undertake insurance distribution or reinsurance distribution in that host Member State.

• (5) An insurance, reinsurance or ancillary insurance intermediary shall notify the Bank of any material change to the information provided in accordance with paragraph (1) at least one month before implementing the change.

• (6) The Bank shall inform the competent authority of the host Member State of any change notified in accordance with paragraph (5) not later than one month from the date of receipt of the information by the Bank.

Carrying on business in the State

• (2) Where the Bank receives information sent in accordance with Article 4(2) of the Directive of 2016 from the competent authority of another Member State, the Bank shall acknowledge receipt of that information without delay.

Requirement to notify Bank of branch or permanent presence in another Member State

• (a) the name, address and, where applicable, the registration number of the intermediary;

• (b) the Member State within the territory of which the intermediary plans to establish a branch or permanent presence;

• (c) the category of intermediary and, if applicable, the name of any insurance or reinsurance undertaking represented;

• (d) the relevant classes of insurance, if applicable;

• (e) the address in the host Member State from which documents may be obtained;

• (f) the name of the person responsible for the management of the branch or permanent presence.

• (2) Subject to Regulation 19, the Bank shall, not later than one month after receiving the information specified in paragraph (1), communicate that information to the competent authority of the host Member State, which shall pursuant to the Directive of 2016 acknowledge its receipt without delay.

• (3) Where the Bank receives an acknowledgement of receipt of the information sent in accordance with paragraph (2) from the competent authority of the host Member State, the Bank shall inform the insurance, reinsurance or ancillary insurance intermediary concerned in writing that the information has been received by the competent authority of the host Member State.

• (4) In accordance with the Directive of 2016, the competent authority of the host Member State shall, not later than one month after the date of receipt of the information sent by the Bank in accordance with paragraph (2), inform the Bank of the general good rules of that host Member State that are available on the EIOPA website and the point of contact responsible for providing such information.

• (5) When the Bank receives information from the competent authority of the host Member State of the general good rules and point of contact referred to in paragraph (4), the Bank shall inform the insurance, reinsurance or ancillary insurance intermediary in writing of those rules and that the intermediary may begin to undertake insurance distribution or reinsurance distribution in that host Member State provided it complies with the general good rules of the host Member State.

• (6) An insurance, reinsurance or ancillary insurance intermediary may establish a branch and commence its business on the occurrence of the earlier of the following:

• (a) as soon as it is informed by the Bank under paragraph (5) of the matters to which that paragraph relates;

• (b) on the expiry of a 2 month period from the date on which the intermediary gives a notification to the Bank under paragraph (1).

• (7) An insurance, reinsurance or ancillary insurance intermediary shall notify the Bank of any material change to the information provided in accordance with paragraph (1) not later than one month before implementing the change.

• (8) The Bank shall inform the competent authority of the host Member State of any change notified in accordance with paragraph (7) no later than one month from the date of receipt of the information.

Establishment of branch or permanent presence in the State

• (2) Before the branch or permanent presence of an insurance, reinsurance or ancillary insurance intermediary registered in a Member State other than the State begins to undertake insurance or reinsurance distribution in the State, the Bank shall not later than one month after the date of receipt of the information referred to in paragraph (1), notify the competent authority of the home Member State of the conditions under which, in the interest of the general good, that business shall be pursued in the State.

• (3) The insurance, reinsurance or ancillary insurance intermediary may establish the branch or permanent presence and start to undertake insurance or reinsurance distribution in the State on the occurrence of the earlier of the following:

• (a) as soon as it is informed by the relevant competent authority of the home Member State, that the competent authority of the home Member State has received the notification referred to in paragraph (2);

• (b) on the expiry of a one month period from the date on which information is sent in accordance with Article 6(2) of the Directive of 2016 from the competent authority of its home Member State.

Refusal to process notification

• (2) Where the Bank refuses to communicate the information referred to in paragraph (1) of Regulation 17 to the competent authority of a host Member State, it shall give reasons for its refusal to the insurance, reinsurance or ancillary insurance intermediary concerned not later than one month after receiving the information referred to in that paragraph.

• (3) A refusal or failure by the Bank to communicate the information referred to in Regulation 17(1) shall be an appealable decision for the purpose of Part VIIA of the Act of 1942.

Part 5 Organisational Requirements

Competence requirements

• (2) The Bank shall—

• (a) ensure that insurance and reinsurance intermediaries and, where applicable, their employees and the employees of insurance and reinsurance undertakings, comply with continuing professional training and development requirements in order to maintain an adequate level of performance corresponding to the role they perform and the relevant market, and

• (b) have in place and publish on its website, mechanisms to control effectively and assess the knowledge and competence of insurance and reinsurance intermediaries and, where applicable, their employees and the employees of insurance and reinsurance undertakings based on, not less than, 15 hours of professional training or development per year, taking into account the nature of the products they sell, the type of insurance they distribute, the role they perform and the activity carried out within the insurance or reinsurance distributor.

• (3) Insurance and reinsurance intermediaries shall demonstrate to the Bank their compliance with the relevant professional knowledge and competence requirements specified in the Schedule.

• (4) The Bank may adjust, where appropriate, the required conditions with regard to knowledge and ability in line with the particular activity of insurance or reinsurance distributors and the products they distribute.

• (5) An insurance or reinsurance undertaking, or insurance or reinsurance intermediary, shall ensure the good repute of its employees and, where appropriate, of its insurance or reinsurance intermediaries, who are involved in insurance or reinsurance distribution activities and shall ensure, at least, that such undertakings, intermediaries or employees have—

• (a) a clean criminal record or any other national equivalent in relation to serious criminal offences linked to crimes against property or other crimes related to financial activities, and

• (b) they shall not have previously been declared bankrupt, unless they stand discharged from bankruptcy in accordance with the Bankruptcy Act 1988 (No. 27 of 1988).

• (6) Paragraph (5) shall not apply to natural persons who work in an insurance or reinsurance undertaking, or insurance or reinsurance intermediary provided that they are not—

• (a) directly involved in insurance or reinsurance distribution, and

• (b) within the management of the insurance or reinsurance undertaking, or insurance or reinsurance intermediary and responsible for insurance or reinsurance distribution.

• (7) An ancillary insurance intermediary shall ensure—

• (a) the good repute of the persons who are responsible for ancillary insurance distribution, and

• (b) that such persons shall have—

• (i) a clean criminal record or any other national equivalent in relation to serious criminal offences linked to crimes against property or other crimes related to financial activities, and

• (ii) they shall not have previously been declared bankrupt, unless they stand discharged from bankruptcy in accordance with the Bankruptcy Act 1988 (No. 27 of 1988).

Indemnities, protections and policies

• (2) Every insurance, reinsurance or ancillary insurance intermediary shall take all necessary steps to protect customers against the inability of the intermediary, in an appropriate case, to—

• (a) transfer to the relevant insurance or reinsurance undertaking premiums paid by those customers,

• (b) transfer the amounts of claims payable to those customers, and

• (c) return premiums payable to those customers.

• (3) Without limitation of paragraph (2), the following provisions apply for the purpose of providing protection to customers of an insurance, reinsurance or ancillary insurance intermediary:

• (a) premiums paid by a customer to the intermediary are taken to have been paid to the relevant insurance or reinsurance undertaking;

• (b) money paid by an insurance or reinsurance undertaking to the intermediary for a customer are taken not to have been paid to the customer until the customer actually receives it;

• (c) the intermediary shall ensure that premiums and other monies paid to the intermediary by customers or by an insurance or reinsurance undertaking are held in, and only transferred by means of, strictly segregated client premium accounts and that the money held in those accounts cannot be used to reimburse other creditors should the intermediary become insolvent.

• (4) Insurance and reinsurance undertakings shall approve, implement and regularly review their internal policies and appropriate internal procedures to ensure compliance with the requirements in Regulation 20 and this Regulation.

• (5) Insurance and reinsurance undertakings shall identify a function to ensure the proper implementation of the endorsed policies and procedures.

• (6) Insurance and reinsurance undertakings shall establish, maintain and keep up-to-date records of all the relevant documentation regarding the application of Regulation 20 and this Regulation.

• (7) Insurance and reinsurance undertakings shall, upon request, make available the name of the person responsible for the function referred to in paragraph (5) to the Bank.

• (8) In this Regulation, “ring-fenced” means the cover or portion thereof, provided by the professional indemnity insurance or comparable guarantee, that is strictly reserved in respect of liability arising from professional negligence in connection with insurance or reinsurance distribution activities, including those activities previously described as insurance or reinsurance mediation activities, and no other activities, where an aggregate limit applies to the cover.

Complaints procedures

• (2) Insurance and reinsurance distributors shall provide a written reply to all complaints received from their customers by them.

Part 6 Cooperation with Member States

Cooperation and exchange of information with competent authorities of Member States

• (2) The Bank shall, particularly in the process of registration and on an ongoing basis, share with the competent authorities of other Member States any relevant information concerning the good repute, professional knowledge and the competence of insurance and reinsurance distributors registered in the State or in any of the other Member States.

• (3) Without limitation of paragraph (1), the Bank shall notify the competent authorities of other Member States concerned of particulars of—

• (a) any penalty or administrative sanction that has been imposed on an insurance or reinsurance intermediary, or ancillary insurance intermediary, under Regulation 57 or the Act of 1942, as the case may be, or

• (b) any sanction that has been imposed on the intermediary by the Bank in accordance with Part IIIC of the Act of 1942,

but only if notification of those particulars is likely to lead to withdrawal of the intermediary’s registration.

• (4) All persons required to receive or divulge information in connection with the Directive of 2016 and these Regulations shall be bound by professional secrecy, in the same manner as is set out in section 33AK of the Act of 1942.

Division of competence between home and host Member States

• (2) Where an insurance, reinsurance or ancillary insurance intermediary, registered in another Member State, has its primary place of business located in the State, the Bank may agree with the competent authority of the other Member State that the Bank may act as if it were the home Member State competent authority with regard to Chapters IV to VII of the Directive of 2016.

• (3) The Bank shall notify the insurance, reinsurance or ancillary insurance intermediary concerned and EIOPA without delay upon reaching an agreement in accordance with paragraph (1).

• (4) Upon reaching an agreement in accordance with paragraph (1), the Bank shall no longer—

• (a) have responsibility for ensuring that the services provided by the insurance, reinsurance or ancillary insurance intermediary outside the State comply with the obligations set out in Chapters V and VI of the Directive of 2016 and with these Regulations, and

• (b) have the right to examine establishment arrangements and to request such changes as are needed to enable the Bank to enforce the obligations under Chapters V and VI of the Directive of 2016 or these Regulations with respect to the services or activities provided by the establishment outside the State.

• (5) Upon reaching an agreement in accordance with paragraph (2), the Bank shall—

• (a) have responsibility for ensuring that the services provided by the insurance, reinsurance or ancillary insurance intermediary within the State comply with the obligations set out in Part 7, and

• (b) have the right to examine establishment arrangements and to request such changes as are needed to enable the Bank to enforce the obligations under these Regulations with respect to the services or activities provided by the establishment within the State.

Cooperation between competent authorities on freedom to provide services — host member state

• (2) Where, despite action being taken by the competent authority of the home Member State pursuant to paragraph (1), the insurance, reinsurance or ancillary insurance intermediary continues to act in a manner that is detrimental to the interests of consumers in the State on a large scale or to the orderly functioning of insurance and reinsurance markets, the Bank may, after informing the competent authority of that home Member State, take appropriate action to prevent further irregularities, including, in so far as it is strictly necessary, preventing that intermediary from continuing to carry on new business within the State.

• (3) The Bank may refer the matters referred to in this Regulation to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

• (4) Nothing in this Regulation shall affect the power of the Bank to take such immediate action as it deems appropriate or necessary to prevent or penalise irregularities committed by an insurance, reinsurance or ancillary insurance intermediary in the State in order to protect the rights of consumers, including, in so far as it is strictly necessary, preventing that intermediary from continuing to carry on new business within the State.

• (5) Any action taken by the Bank under this Regulation shall be communicated to the insurance, reinsurance or ancillary insurance intermediary concerned setting out the reasons for the action and notified without undue delay to the competent authority of the intermediary’s home Member State, EIOPA and the Commission.

Cooperation between competent authorities on freedom to provide services — home member state

• (2) The Bank shall inform the competent authority of the host Member State of any action taken pursuant to paragraph (1).

• (3) The Bank may refer the matters referred to in this Regulation to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

Cooperation between competent authorities on freedom of establishment — host member state

• (2) Where the Bank has reason to consider that an insurance, reinsurance or ancillary insurance intermediary that has established a branch or permanent presence in the State is in breach of any obligation set out in the Directive of 2016, and where the Bank does not have responsibility in accordance with Regulation 24(2), it shall refer those findings to the competent authority of the home Member State.

• (3) Where, despite action being taken by the competent authority of the home Member State pursuant to Article 8(1) of the Directive of 2016, the insurance, reinsurance or ancillary insurance intermediary continues to act in a manner that is detrimental to the interests of consumers in the State on a large scale or to the orderly functioning of insurance and reinsurance markets, the Bank may, after informing the competent authority of the home Member State, take appropriate action to prevent further irregularities, including, in so far as it is strictly necessary, preventing that intermediary from continuing to carry on new business within the State.

• (4) The Bank may refer the matters referred to in this Regulation to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

• (5) Nothing in this Regulation shall affect the power of the Bank to take such immediate action as it deems appropriate or necessary to prevent or penalise irregularities committed by an insurance, reinsurance or ancillary insurance intermediary in the State in order to protect the rights of consumers and where equivalent measures of the home Member State are inadequate or lacking, including, in so far as it is strictly necessary, preventing that intermediary from continuing to carry on new business within the State.

• (6) Any action taken by the Bank under this Regulation shall be communicated to the insurance, reinsurance or ancillary insurance intermediary concerned setting out the reasons for the action and notified without undue delay to the competent authority of the intermediary’s home Member State, EIOPA and to the Commission.

Cooperation between competent authorities on freedom of establishment — home member state

• (a) assess the information received from the competent authority in the host Member State,

• (b) where necessary, at the earliest opportunity take appropriate measures to remedy the situation, and

• (c) inform the competent authority in the host Member State of any such measures taken.

• (2) The Bank may refer the matters referred to in this Regulation to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

• (3) Any action taken by the Bank under this Regulation shall be communicated to the insurance, reinsurance or ancillary insurance intermediary concerned setting out the reasons for the action and notified without undue delay to the competent authority of the intermediary’s home Member State, EIOPA and to the Commission.

Out-of-court redress

• (2) The Financial Services and Pensions Ombudsman shall cooperate with relevant bodies in other Member States in the resolution of cross-border disputes concerning rights and obligations arising under the Directive of 2016.

PART 7 Information requirements and conduct of business rules

Chapter 1 Information

Information requirements and conduct of business rules

• (2) Without prejudice to the Consumer Protection Act 2007 (No. 19 of 2007), all information related to insurance distribution, including marketing communications, addressed by the insurance distributor to customers or potential customers shall be fair, clear and not misleading and all marketing communications shall be clearly identifiable as such.

• (3) Insurance distributors shall not be remunerated, or remunerate or assess the performance of their employees, in a way that conflicts with their duty to act in accordance with the best interests of their customers and, in particular, an insurance distributor shall not make any arrangement by way of remuneration, sales targets or otherwise that could provide an incentive to itself or its employees to recommend a particular insurance product to a customer when the insurance distributor could offer a different insurance product which would better meet the customer’s needs.

Information and transparency requirements for insurance intermediaries

• (a) the intermediary’s identity and address and that it is an insurance intermediary;

• (b) whether the intermediary provides advice about the insurance products sold;

• (c) the complaints procedures and the ability of the customer to make a complaint to the Financial Services and Pensions Ombudsman;

• (d) the register in which the intermediary has been included and the means for verifying that it has been registered;

• (e) whether the intermediary is representing the customer or is acting for and on behalf of the insurance undertaking;

• (f) whether the intermediary has a holding, direct or indirect, representing 10 per cent or more of the voting rights or of the capital in a given insurance undertaking;

• (g) whether a given insurance undertaking or parent undertaking of a given insurance undertaking has a holding, direct or indirect, representing 10 per cent or more of the voting rights or of the capital in the insurance intermediary;

• (h) in relation to the contracts proposed or advised upon, whether—

• (i) the intermediary gives advice on the basis of a fair and personal analysis,

• (ii) the intermediary is under a contractual obligation to conduct insurance distribution business exclusively with one or more insurance undertakings, in which case it is to provide the names of those insurance undertakings, or

• (iii) the intermediary is not under a contractual obligation to conduct insurance distribution business exclusively with one or more insurance undertakings and does not give advice on the basis of a fair and personal analysis, in which case it is to provide the names of the insurance undertakings with which it may and does conduct business;

• (i) the nature of the remuneration received by the intermediary in relation to the insurance contract;

• (j) whether in relation to the insurance contract, the intermediary works—

• (i) on the basis of a fee, that is the remuneration paid directly by the customer,

• (ii) on the basis of a commission of any kind, that is the remuneration included in the insurance premium,

• (iii) on the basis of any other type of remuneration, including an economic benefit of any kind offered or given in connection with the insurance contract, or

• (iv) on the basis of a combination of any type of remuneration set out in clauses (i), (ii) and (iii).

• (2) An insurance intermediary shall inform the customer of the amount of any fee to be directly paid by the customer or, where that is not possible, of the method for calculating the fee.

• (3) An insurance intermediary shall also provide the information in accordance with subparagraphs (f) to (j) of paragraph (1), and paragraph (2), for any payments made by the customer under the insurance contract after its conclusion, other than the ongoing premiums and scheduled payments.

Information and transparency requirements for insurance undertakings

• (a) that it is an insurance undertaking;

• (b) the undertaking’s identity and address;

• (c) whether the undertaking provides advice about the insurance products sold;

• (d) the complaints procedures and the ability to make a complaint to the Financial Services and Pensions Ombudsman.

• (2) An insurance undertaking shall communicate to its customer the nature of the remuneration received by its employees in relation to the insurance contract in good time before the conclusion of an insurance contract.

• (3) An insurance undertaking shall also provide the information in accordance with paragraphs (1) and (2) for any payments made by the customer under the insurance contract after its conclusion, other than the ongoing premiums and scheduled payments.

Information requirements for ancillary insurance intermediaries

Advice, and standards for sales where no advice is given