As previously communicated, the Central Bank will conduct a series of themed reviews throughout 2012 to monitor and enforce compliance with Prudential and Conduct of Business Rules.
We will be commencing a themed review of retail intermediaries’ Professional Indemnity Insurance (“PII”) cover in the coming weeks. We will specifically target firms for inspection, which are non-compliant in terms of submitting annual returns and/or payment of levies and/or based on other concerns.
To facilitate the work of our Authorised Officers when they visit and to minimise disruption to the business of Retail Intermediaries, we would ask that all intermediaries have available at their place of business their PII Schedule together with the contact details of their insurance company and/or their insurance broker.
PII cover provides protection for professional negligence on the part of a firm registered under the EC (Insurance Mediation) Regulations 2005 (“IMR”) and a lack of appropriate PII cover is a significant risk to consumers.
It is important to note that failure to have in place PII or the appropriate level of PII may be a criminal offence in accordance with Regulation 32 (2) of the IMR. In addition, the Central Bank of Ireland has various regulatory powers in relation to a failure by a firm registered under the IMR to have in place PII or the appropriate level of PII including, without limitation, the power to cancel the registration of any firm found to be in breach of this requirement in accordance with Regulation 11 (1) of the IMR.
All insurance or reinsurance intermediaries which are registered under the IMR are required to hold a valid policy of PII. Regulation 17(1) of the IMR specifies that the policy must provide cover at the following levels:
Not less than €1,000,000 for each claim received within each calendar year and;
Not less than €1,500,000 for all claims received within that year
This level of cover is required unless the insurance, or other guarantee, is already provided by:
on whose behalf the insurance or reinsurance intermediary is acting, or for which it is empowered to act, or the undertaking has taken full responsibility for the intermediary’s actions.
Please follow the link below for details of our recent Press Release on Themed Inspections during 2012:
Programme of Themed Reviews and Inspections for 2012