Central Bank implements new Insurance Regulations
Executive Summary
The Central Bank of Ireland (CBI) published the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Insurance Requirements) Regulations 2022 on 15 March 2022, banning price walking in motor and home insurance from 1 July 2022 to eliminate loyalty penalties for renewing customers while preserving new customer discounts and competition. This matters for compliance professionals as it imposes immediate prohibitions on differential pricing, mandatory annual reviews, enhanced renewal disclosures, and record-keeping, with CBI emphasizing ongoing oversight to ensure fair consumer outcomes. #
What Changed
- - Ban on Price Walking: Insurance undertakings and intermediaries cannot charge renewing customers (defined as "relevant renewing customers") a premium higher than that charged to an equivalent year-one renewal consumer (EQFRP) for motor and home ins
- Annual Pricing Reviews: Firms must conduct an annual review of motor and home insurance pricing policies and processes within two months of each year-end to ensure compliance, including controls to prevent price walking and adherence to Consumer Prot
- Automatic Renewal Disclosures: Firms must provide specific information to consumers before automatic renewals, including renewal price, right to cancel, and options to switch providers, to promote awareness and switching.
- Record-Keeping: Written records must be retained for annual reviews, material pricing decisions, and compliance assessments. No submission to CBI is required, but records must be available upon request.
- Scope Exclusions: Applies prospectively from 1 July 2022; no retrospective application or transitional period. Exemptions for small businesses (e.g., annual turnover ≤€3 million, not part of larger groups).
Suggested Considerations
- Pricing Adjustments: Update systems/models to ensure renewal prices ≤ EQFRP; identify close-matched products for comparisons.
- Conduct Reviews: Perform comprehensive annual review of pricing policies/processes, documenting compliance, controls, and rectifications; avoid "tick-box" approaches.
- Enhance Communications: Revise renewal notices/documents to include mandated info (e.g., price, cancellation rights, switching options); handle pre-1 July notices pragmatically but comply in spirit.
- Record Maintenance: Retain written records of reviews, pricing decisions, and compliance evidence for audit readiness.
- Internal Governance: Assess/align with CPC General Principle 2.1; monitor for material changes requiring documented consistency checks.
- Testing/Training: Test operational readiness pre-1 July 2022; train staff on prohibitions and disclosures.
Compliance Impact
Urgency: Medium (as of 2026). The regulations have been effective since 1 July 2022 with no transitional period, requiring immediate system/process overhauls at implementation; non-compliance risks enforcement under Section 48 of the 2013 Act. Ongoing annual reviews and CBI's commitment to monitoring pricing practices sustain medium-term priority, especially amid CBI's consumer protection focus, b
Who is Affected
References
AI-generated analysis. May contain errors or omissions — verify with the original CBI source before acting. Full disclaimer.
Summary
Ban on price walking in motor and home insurance comes into effect on 1 July 2022. New customer discounts not affected. For automatic renewals, better information and reminders to be provided to encourage switching. The Central Bank of Ireland has today published the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Insurance Requirements) Regulations 2022 which will apply to insurance undertakings and insurance intermediaries from 1 July 2022. The Central Bank identified d...