The Dublin International Insurance & Management Association (DIMA), which represents the majority of non-life insurers, non-life and life reinsurers, and captive managers located in Ireland, has strongly rejected claims that it has lobbied the Irish Government not to accede to a European Commission Directorate that proposes to introduce mandatory regulatory standards for the reinsurance industry in Ireland.
DIMA’s bulletin noted that the “claims were made in a recent newspaper article by Queen’s University, Belfast academic Justin O’Brien.” DIMA’s CEO Sarah Goddard emphatically rejected his views. “DIMA and its members have fully supported the move to full reinsurance regulation in Europe and have worked closely with the relevant Irish authorities to promote the directive. It is absolutely not the case that we have somehow lobbied against the directive,” she stated.
Ms. Goddard also rejected the suggestion that there is “light touch” regulation in Ireland, indicating: “Through my many dealings with the Financial Regulator, I would characterize it as ‘firm but fair’. To suggest that there is somehow ‘light touch’ regulation is simply not the case.”
At the same time, she pointed out that regulatory authorities are enforcement agencies and cannot prevent every instance of potentially improper behavior. “There have been well-documented examples ranging from inappropriate through to outright fraudulent practices in the most tightly regulated jurisdictions over many decades,” she noted. “The existence of strong regulation does not automatically prevent all problems. Conversely, less onerous regulatory regimes can encourage innovations which ultimately benefit the market as a whole.”
DIMA’s bulletin also stressed: “The international reinsurance market operating in Ireland will be the first reinsurance sector in a European member state to be fully regulated specifically under the Reinsurance Directive. The Reinsurance Directive was published in the Official Journal of the European Union on 9 December 2005, and is the first European-wide regulatory regime for the reinsurance industry. Historically, reinsurance has been viewed as a business-to-business industry with highly informed professionals, and as a consequence most jurisdictions currently do not regulate the sector.”
Goddard commented: “Although the Reinsurance Directive allows for a two-year transposition period from the date it was published in the Official Journal, Ireland took the position early last year that it would aim for an accelerated adoption of the Directive into Irish legislation. DIMA has actively supported that decision, and has been working closely with Government and the Irish Financial Regulator over the course of 2005 to ensure that a comprehensive regulatory regime will be implemented in 2006.”
The bulletin also indicated that “while DIMA cannot comment upon the circumstances of individual member companies, Ms Goddard expressed her concern that the historic circumstances surrounding one organization which is no longer actively trading in Ireland have been used by Mr. O’Brien to censure the marketplace and authorities.”
She concluded: “We live in a world of ever-increasingly stringent regulatory and corporate governance requirements. DIMA as an organization has promoted transparency, integrity and ethical behavior throughout its membership; these are the vital foundation stones upon which a successful reinsurance sector thrives.”
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