22/09/2025
Insights Blog

The Central Bank of Ireland (“CBI“) recently published its quarterly Insurance Newsletter – September 2025. The main points of interest for the insurance industry are:

Insights on asset-intensive reinsurance

In May 2025, the CBI issued a data request in relation to asset-intensive reinsurance (“AIR“) to 11 firms, made up of life insurers and reinsurers covering domestic and international business (see our previous article for further background on the CBI’s interest in AIR). The data request focused on exposure to AIR, collateral, risk management and the impact of default.

The responses indicate that exposure to AIR is broadly in line with the CBI’s expectations, amounting to c.€30 billion at the 2024 year end, or roughly 8% of total technical provisions for life (re)insurers, with approximately €23 billion of that relating to with-profits business that transferred to Ireland post-Brexit. Based on the survey, AIR exposure is projected to increase by c.5% over 2025. In general, AIR exposure is well collateralised with high-quality assets, with almost 90% of collateral assets comprising investment grade equities, sovereign bonds and corporate bonds. The CBI also set out a summary of good risk management practices observed as part of the survey.

The CBI reminds firms that entering into material AIR transactions (either as reinsurance or retrocession) will require pre-notification to the CBI as a material change to a firm’s business, under its conditions of authorisation.

Thematic review on health insurance

The CBI recently completed a thematic review on consumer treatment when purchasing or renewing health insurance. While the review identified a number of positive practices, it highlighted that health insurers need to take additional steps to ensure that consumers are provided with an appropriate level of assistance and advice, effective information and customer service.

In July 2025, the CBI issued a “Dear Compliance Officer” letter setting out its expectations for health insurance providers, requiring them to complete a gap analysis in this area. Some of the priority CBI expectations included conducting full suitability assessments and including fact find and comparison tools on their websites.

Speciality insurance firms – intra-group outsourcing

Similarly, the CBI conducted a thematic risk assessment of speciality insurance firms (i.e. those that provide cover for unique, unusual or high-risk exposures not typically addressed by standard insurance policies). The assessment focused on intra-group outsourcing arrangements for speciality firms, with the results highlighting that there is a significant reliance on intra-group outsourcing across such firms, through the use of shared service structures or third country branches.

The CBI emphasised that specialty firms that rely on such arrangements must ensure adequate substance in Ireland, with oversight and decision-making happening locally. Any “disproportionate dependence” is to be addressed (echoing the terminology of the EIOPA supervisory statement on the use of governance arrangements in third countries).

Importantly, the CBI expects that where such firms underwrite EEA business, they are taking action to build their presence in the EEA versus a third country, and developing an action plan in this regard where appropriate. Such an action plan should set out the steps and timeline to ensure alignment with CBI expectations.

This assessment appears to reflect the focus of the CBI on the risks inherent in specialty lines of business, as mentioned in the Regulatory & Supervisory Outlook Report 2025.

Solvency II review and the IRRD

The CBI reminds firms that the planned changes to the Solvency II Delegated Acts will come into force in January 2027, alongside the revisions to Solvency II and the Insurance Recovery and Resolution Directive (“IRRD“). The CBI expects that most elements are likely to stay as currently proposed and that, as part of its regular supervision, it will be engaging with firms to understand:

  • how (re)insurers are preparing to implement the upcoming changes;
  • which firms plan to seek classification as a small and non-complex undertaking; and
  • the impact of the changes on firms’ regulatory balance sheets.

See our previous articles for details of the proposed updates to Solvency II Delegated Regulation, as well as the key changes to Solvency II.