PartnerRe firms fined €1.5m for EU breach
THE Central Bank of Ireland has fined global insurer PartnerRe Ireland Insurance and sister company Partner Reinsurance Europe, €1.5m for failing to adhere to European Union insurance regulations.
The fine, one of the largest ever issued by the Central Bank of Ireland (CBI), is in respect of breaches of the Solvency II regime for European insurance companies. It is the first enforcement action here in respect of breaches of Solvency II, which came into force in 2016.
Neither of the two companies fined deal with consumers, instead they provide insurance and reinsurance services for the European business of their parent company, Bermuda-based Partner Re Ltd. Solvency II mainly concerns the financial strength that insurance companies are required to have in order to absorb potential losses without a risk of insolvency.
PartnerRe Ireland was fined for a total of six breaches of regulation, while Partner Reinsurance Europe was fined in respect of three breaches.
The breaches involved weaknesses in the companies’ corporate governance relating to their internal reporting and internal controls in respect of Solvency II requirements.
Fines were imposed after regulators found governance failings had resulted in breaches relating to the calculation of the capital requirement for 2016, and the submission of incorrect information to the Central Bank.
“The CBI’s investigations found that the companies submitted regulatory returns to the CBI, which overstated their solvency positions,” Seána Cunningham, of the CBI, said.
“As a result, both entities were required to re-submit their regulatory returns.
“This revealed that they had not only presented the CBI with an inaccurate picture of their respective solvency positions, but also – in the case of PartnerRe Ireland – it resulted in a breach of its solvency capital requirement,” Ms Cunningham added.
Both PartnerRe Ireland and Partner Reinsurance Europe said yesterday that they had taken “full responsibility” for errors made in their interpretation of the 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,” a spokesperson for the companies said.
“On discovering the discrepancies, the companies immediately reported the issue to the CBI and acted swiftly to remedy the situation. They also initiated an independent third-party review and have since implemented recommendations for improving internal controls and reporting for Solvency II.”