Partner Re European subsidiaries fined by Central Bank of Ireland
PartnerRe Ireland Insurance and Partner Reinsurance Europe have been fined a total of €1.5 million by the Central Bank of Ireland.
The Central Bank said 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.
Failings in corporate governance 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.
The fines were therefore imposed because of breaches of the EU’s Solvency II regulations, the Commission Delegated Regulation (EU) 2015/35 and the Corporate Governance Requirements for Insurance Undertakings 2015.
The Central Bank 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 bank.
“Solvency II is a harmonised 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.”
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.”
