Tuesday, 29 September 2020

Ceisteanna (303)

Bernard Durkan

Ceist:

303. Deputy Bernard J. Durkan asked the Minister for Finance his plans to discourage entrants into the banking or insurance sector here by applicants seeking market share to distort the market and, subsequently, exiting with no apparent penalties; the number of banking and insurance companies that have done so in the past ten years; and if he will make a statement on the matter. [27248/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As the Deputy will be aware, the European Central Bank (ECB) has been the competent authority for issuing banking licences since 2014.

Banking licences for institutions to be domiciled in Ireland are only issued once the Central Bank and ECB are satisfied that the business model of an applicant is viable and sustainable.

I have been advised by the Central Bank that in the past ten years, three new licences have been issued. Over the same period, twenty five banks revoked their banking licence.

The European licence passporting mechanism also enables European Economic Area banks to provide services in Ireland either through a physical presence or on a cross border basis.

The Central Bank does not have a role in the prudential authorisation of such activity, which is the responsibility of the Home Country Supervisory Authority.

Insurance firms seeking authorisation in Ireland are subject to robust review. Details on the authorisation process is set out on the Central Bank’s website (see link 1 below).

The Solvency II Directive also enables European Economic Area insurance companies to provide insurance in Ireland either through a physical presence or on a cross border basis.

These firms are subject to Irish General Good Requirements for Insurance Undertaking (see link 2 below) and are under the prudential supervision of their Home Country Supervisory Authority.

I have been advised by the Central Bank that in the past ten years, 30 Non-Life & Life (non-captive) licences have been issued. Over the same period, 75 Non-Life & Life firms (non-captive) revoked their licence.

Registers of insurance firms notified as operating in Ireland are available on the Central Bank’s website (see link 3 below).

While competition in the market is important, the Central Bank expects all regulated firms to take a consumer centric approach and to act and in their customers’ best interests at all times.

Regulated firms must act in accordance with the requirements of financial services legislation, including Central Bank Codes.

The consumer protection framework protects consumers and ensures they are treated fairly by regulated entities.

This commitment is strongly affirmed in the Central Bank’s Consumer Protection Code 2012 (see link 4 below), which provides that a regulated firm must ensure that in all its dealings with customers and within the context of its authorisation it acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market.

1. https://centralbank.ie/regulation/how-we-regulate/authorisation

2. https://www.centralbank.ie/docs/default-source/regulation/industry-market-sectors/

insurance-reinsurance/solvency-ii/requirements-and-guidance/general-good-requirements-for-insurance-undertakings-2019.pdf?sfvrsn=6

3. http://registers.centralbank.ie/

4. https://www.centralbank.ie/regulation/consumer-protection/consumer-protection-codes-regulations