Irish captives escape regulation of service companies
Captives are expected to escape new guidelines from the Central Bank of Ireland (CBI) on the use of service companies for staffing in the insurance industry.
The guidelines will set out the bank’s expectations in terms of managing the risks associated with such agreements.
âThe Central Bank has observed a practice in the insurance industry whereby a number of insurance and reinsurance undertakings (companies) seek to enter into, or have entered into, agreements for the use of separate legal entities for the supply of important personnel to the company (provisions relating to personnel) â, the orientation project States.
âThese entities, often referred to as service companies or service providers, are usually part of the same group as the business. The Central Bank focuses on these personnel arrangements because of their potential, if not managed effectively, to threaten the operational resilience of enterprises regulated by the Central Bank.
He adds: âIt is the responsibility of works councils to ensure that appropriate governance structures are in place, including appropriate organizational and operational structures and risk management systems and, where applicable. not the case, modify or properly eliminate inappropriate structures. or arrangements.
The guidance makes an exception for agreements between captive re / insurance companies and captive management companies for captive management services, âdue to the specificity of the captive re / insurance modelâ.
While the consultation on the guidance, released in August, does not end until Saturday, lawyers at Irish business law firm Mason Hayes & Curran say they should stay.
“[W]We believe that industry participants can expect the CBI to issue the proposed guidelines on time without significant changes. Indeed, the publication of CP144 followed that of an earlier discussion paper in which the CBI raised many of the same issues, so it seems determined to legislate in this area, âwrite partners Rowena Fitzgerald and Liam Flynn in an update.
Others, however, should review their practices. “Re / insurers would be well advised to review their existing staffing arrangements against the proposed guidelines and identify any gaps in documentation, processes and procedures to ensure they are able to meet the expectations of the company. the CBI, âthey say.
corporate regulation, captives, Central Bank of Ireland (CBI), insurance, reinsurance, UK, Mason Hayes & Curran