Central Bank hands down €1.5m fine in first Solvency II enforcement action

PartnerRe Ireland Insurance dac (PRIID) was reprimanded for six breaches of EU law since the inception of the Solvency II regime on 1 January 2016, and Partner Reinsurance Europe SE (PRESE) was reprimanded for three breaches.

The breaches involved weaknesses in PRIID and PRESE’s corporate governance frameworks relating to their internal reporting and internal controls in respect of Solvency II requirements.

Seána Cunningham, the Central Bank’s director of enforcement and anti-money laundering, said: “Solvency II is a harmonised insurance regulatory regime aimed at further protecting policyholders and creating a more resilient insurance sector. This is the Central Bank’s first enforcement action in respect of Solvency II breaches.

“The breaches in both of these investigations centre around one of the key requirements of the Solvency II regime, the Solvency Capital Requirement. The Solvency Capital Requirement requires firms to maintain sufficient capital to ensure that they can meet their obligations to policyholders.”

Ms Cunningham added: “This enforcement action demonstrates the importance the Central Bank places on firms meeting their regulatory obligations under Solvency II and the Corporate Governance Requirements.”

A spokesperson for PartnerRe said: “Following a regulatory investigation by the Central Bank of Ireland into PartnerRe’s Dublin-based legal entities, PartnerRe Ireland Insurance dac (PRIIdac) and Partner Reinsurance Europe SE (PRESE), PartnerRe has taken full responsibility for errors made in its interpretation of Solvency II capital requirements in 2016.

“While both companies were at all times solvent and policyholders were never at risk from an economic perspective, mistakes were made in the 2016 quarterly filings by each company. On discovering the discrepancies, the companies immediately reported the issue to the Central Bank and acted swiftly to remedy the situation. They also initiated an independent third party review and have since implemented recommendations for improving their internal controls and reporting processes for Solvency II.

“While disappointed to have fallen short of our own high expectations, we are pleased that the investigation has now concluded and the Central Bank has indicated its satisfaction with our remediation efforts and our improved governance and processes.”