In my role as the Minister for Finance I have responsibility for the development of the legal framework governing financial regulation. The day to day responsibility for the supervision of financial institutions is a matter for the Central Bank of Ireland, which is statutorily independent in the exercise of its regulatory functions. The decision to provide any specific form of insurance cover and the price at which it is offered is a commercial matter based on the assessment an insurer will make of the risks involved and a need to ensure adequate provisioning for future losses. The Central Bank has no remit over the pricing of insurance products. Competent Authorities are specifically restricted from interfering in the pricing of insurance products under the various European insurance directives.
The legal and regulatory framework for the provision of insurance in the EEA, and the supervision of that activity, is prescribed by European Union Law in the Life and Non-Life Insurance Directives. As such, Member States, such as Ireland, are limited in terms of the matters for which provision may be made in national legislation. That framework expressly prohibits Member States adopting provisions requiring the prior approval or systematic notification of certain matters including general and special policy conditions, scales of premiums and, for life insurance, technical bases used for calculating scales of premiums. Furthermore, in the context of non-life insurance, that framework provides non-life insurers with the freedom to set premiums, as has been acknowledged in case law by the ECJ (Case C-518/06). In this regard, Member States cannot require non-life insurance undertakings to make prior notification or seek prior approval of proposed increases in premium rates, except as part of general a price-control system.
Insurance undertakings carrying on business in Member States, including Ireland, are required by the Life and Non-Life Insurance Directives, as transposed into national law, to establish and maintain technical reserves, an adequate solvency margin and a minimum guarantee fund. Compliance by an insurer with those requirements, which are important financial indicators of an insurer, are designed with policyholders in mind.
