Deadline is extended for 'captives' to apply new company rules
THE Central Bank has given 'captive' insurers an extra three months to comply with new corporate governance rules, but has kept the substance of the rules virtually unchanged after a consultation paper attracted just six industry submissions.
The future corporate governance regime for 'captives' -- which insure risks for their own parent and group companies--- was announced by the Central Bank yesterday, some three months after proposals were first published.
The Central Bank had initially said they would be given a six -month transition period to comply with new rules, including having at least three directors, holding meetings at least twice a year and having a chairman who's not a current or recent executive of the company.
The limited number of submissions received on the consultation paper argued that the implementation timeframe was too tight, with international insurance lobby DIMA suggesting a nine-month transitional period would be more appropriate.
Yesterday the Central Bank confirmed that the code would come into force on September 1, with firms given until May to "implement changes to systems and structures to ensure compliance".
The final version of the code also removed proposals for each 'captive' to appoint a deputy chairman. In its submission, Aon, which said it was acting for 65 'captives', asked for the deputy role to be removed because it "goes against the requirements of Table A of the Companies Act".
Ireland is one of Europe's biggest 'captive' insurance hubs, but some feared competitiveness would be threatened by the Central Bank's tough stance on corporate governance which didn't sit well with the "group" function of 'captives'.
A promise for "proportionate" measures for captives led to them getting their own corporate governance code, which is significantly less onerous than the general code for banks and insurers.