Irish-based insurers urged to improve Brexit preparations

Central Bank has written to insurance companies requesting details on consequences of Brexit

The Central Bank has written to all insurance companies requesting they file details of the potential impact of Brexit on their operation. Photograph: Alan Betson/The Irish Times

The Central Bank has written to all insurance companies requesting they file details of the potential impact of Brexit on their operation. Photograph: Alan Betson/The Irish Times

 

Irish-based insurers, including overseas-owned firms, have been pressed by the Central Bank to submit detailed plans on the impact of Brexit on their business, as regulators fear the industry is trailing banks in getting ready for the UK’s exit from the European Union.

Minutes from a meeting of the Central Bank commission on September 29th, published on Wednesday, show that deputy governor, Ed Sibley, “agreed” with an unnamed member of the commission “that the level of preparedness within the insurance sector was not where it should be”.

The document noted that the Central Bank’s director of insurance supervision Sylvia Cronin had written to all insurance companies requesting that they file details of the potential impact of Brexit on their operation and what plans they had made to cover the consequence.

A spokeswoman for the regulator said that the submissions, which were due by the close of business on Tuesday, are currently being considered.

Ms Cronin said in a speech last month that interaction of Irish-based insurers with the UK “are many and varied”, including the sale of insurance products, financial arrangements such as cross-border reinsurance and the use of out-sourced service providers.

Bank approvals

Meanwhile, Mark Cassidy, head of the institution’s Central Bank’s stability division, told the commission, in presenting a fifth quarterly report of the institution’s Brexit task force, that the level of engagements with banks potentially seeking approval to set up in Ireland had “levelled off in the period since the last report”. The previous report was written in June.

Investment banks including Barclays, Bank of America Merrill Lynch and Citigroup had revealed during the summer that they plan to expand their Irish operations as they prepare for the UK to quit the EU in March 2019.

“There is also significant activity in terms of potential authorisation in the asset management area,” the minutes said.

US investment giants Legg Mason and the asset management arm of Morgan Stanley are among firms planning to set up fund management companies in Dublin to maintain access to investors in the EU after Brexit. Such divisions would typically employ between 20 and 50 people to demonstrate that they have substantive operations and the “mind and will” of the entities in Ireland.

Michael Hodson, director of asset management supervision, told the meeting that his division “expected to see a sizeable increase” in 2018 in the number of firms seeking authorisation in Ireland as a result of Brexit.