Insurance intermediaries in Ireland, including general insurance brokers, are no longer to be self-regulated because the industry has failed consumers.
New insurance legislation will transfer the minimal regulation function held by a government department to the Central Bank, the equivalent body to the Bank of England. It will also enable the Irish Government to introduce more wide-reaching disclosure requirements.
The move has been welcomed by broker representative bodies anxious to instil greater levels of public confidence in an industry. Though cases of wrongdoing are relatively few, those that do occur invariably receive national media attention.
The insurance ombudsman scheme, set up by insurance companies and which brokers are not members of, was the subject of a very public row two years ago.
The government minister behind the move, Noel Treacy, said his decision was prompted by "increasing convergence between insurance and investment with both often available from the same intermediary."
He said: "It is essential that vendors of insurance and investment services are regulated by the same regulator if we are to avoid disparity in the regulatory system," he said.
But he criticised the insurance industry's record with the public in relation to disclosure requirements. "It is clear that adequate information is not being provided to enable consumers to make rational and considered choices in relation to the purchase of insurance products," he said.
The new disclosure regime aims to simplify the presentation of insurance products; minimise the scope of mis-selling; ensure greater transparency of charges and expenses and give greater powers of enforcement.