cash-istock-174859932-2
iStock/ Jamesbenet
22 August 2018Insurance

Irish central bank fines PartnerRe for overstated solvency positions

The Central Bank of Ireland has fined PartnerRe Ireland Insurance and Partner Reinsurance Europe a combined €1.5 million.

The central bank also reprimanded Partner Re Ireland for a total of six breaches and Partner Reinsurance Europe for a total of three breaches. Both companies admitted the breaches, according to the central bank.

The breaches were related to EU’s Solvency II regulations, the Commission Delegated Regulation (EU) 2015/35 and the Corporate Governance Requirements for Insurance Undertakings 2015.

The corporate governance failings resulted in breaches of the Solvency II regime relating to the calculation of the firms’ solvency capital requirement for 2016 and the submission of incorrect information to the central bank in respect of their solvency for 2016.

“Solvency II is a harmonized insurance regulatory regime aimed at further protecting policyholders and creating a more resilient insurance sector,” said central bank director of enforcement and anti-money laundering Seána Cunningham. “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,” Cunningham noted.

The central bank’s investigations found that Partner Re Ireland and Partner Reinsurance Europe submitted regulatory returns to the Irish central bank which overstated their solvency positions. This was due to both firms incorrectly calculating their solvency capital requirement. As a result, both entities were required to re-submit their regulatory returns to the central bank. This revealed that they had, not only presented the central bank with an inaccurate picture of their respective solvency positions, but also in the case of PartnerRe Ireland Insurance, it resulted in a breach of its solvency capital requirement.

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," the spokesperson added.

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

More of today's news

Hannover Re picks Swiss Re's Henchoz as new CEO

Enstar secures up to $1bn for acquisitions

AIG replaces chief information officer

Insurtech-based premiums to exceed $400bn by 2023

US reinsurers boost H1 premium, improve combined ratio

Zurich North America hires new chief claims officer from Allied World

Chubb launches major accounts division in Asia Pacific

AXIS names first chief strategy officer

LIIBA warns on missing Brexit equivalence regime for brokers

Joint Hull Committee appoints AXA's Newton as new chairman

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
28 July 2018   Bermuda-based PartnerRe has reported lower non-life underwriting profit for the second quarter of 2018 compared to the same period a year ago due to a reduction in prior-year reserve releases.
Insurance
25 May 2018   Bermuda-based PartnerRe posted a first-quarter 2018 net loss attributable to common shareholder of $120 million after a net income of $38 million for the same period of 2017
Insurance
30 April 2019   The Financial Reporting Council (FRC) has fined KPMG and some of its partners after an investigation found misconduct in relation to the audit of Lloyd’s Syndicate 2018 (Equity Red Star) and actuarial advice given to Equity Syndicate Management (ESML).