As a result of CP 131, the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Recovery Plan Requirements for Insurers) Regulations 2021 commenced on 19 April 2021 and (re)insurers are now required to:
- prepare a pre-emptive recovery plan covering areas including; governance processes, a menu of recovery options, a trigger framework accompanied by a set of stress scenarios and a communication strategy.
- review and, if necessary, update the recovery plan at least every 12 months for High and Medium-High impact firms and at least every 24 months for Medium-Low and Low impact firms or after any material change to the legal or organisational structure of the (re)insurer, its business or its financial position.
- provide a copy of the recovery plan to the Central Bank on request
The deadline for preparation of a recovery plan under the new regulations is 31 March 2022 (or within 12 months of authorisation for (re)insurers newly authorised on or after 19 April 2021). Ultimately, the Solvency II framework is not a zero failure regime and the new regulations therefore provide a framework to ensure failure is managed in such a way that the impact on financial stability, policyholders and beneficiaries is minimised.
- CP140 - Cross Industry Guidance on Operational Resilience Deadline: 09/07/2021
- CP138 - Consultation on Cross-Industry Guidance on Outsourcing Deadline: 26/07/2021
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