THE Department of Enterprise and Employment is reviewing part of the Insurance Act 1989, The Irish Times has learned. The section of the Act dealing with the regulation of insurance intermediaries is expected to be "tightened up" following the decision to appoint the Central Bank as the regulator of investment intermediaries.
One source said the 1989 Act was not "sufficiently rigorous" in the conditions set for regulating brokers who take client funds for investment in insurance products.
There is concern in the financial sector that insurance brokers who take client funds for investment in insurance products would not come under the same regulator or regulatory rules as investment intermediaries. Because some insurance brokers also take in client funds for investment in non insurance products there is concern that some brokers could have two or more regulators.
An industry working party has expressed concern that there will be no regulator with an overview of all intermediary activities, that it would be impossible to ring fence insurance and non-insurance investment activities and that an unequal playing field would emerge with intermediaries opting for the softest regulator.
Brokers who invest funds in insurance and non insurance products would have to report to the Irish Brokers Association or the Insurance Industry Compliance Bureau with respect to insurance investments and the Central Bank in respect of investments in non insurance products.
