Central Bank of Ireland signs settlement agreement with Creation Insurance

The Central Bank and Financial Services Authority of Ireland has entered into a settlement agreement with Creation Insurance of Dublin 2, a regulated financial service provider, in relation to a breach of regulatory requirements.

The breach concerns a failing by the undertaking to comply with Article 13(1) (b) of the European Communities (Non-Life Insurance) Framework Regulations, 1994 which requires non-life insurance entities to maintain a guarantee fund at certain minimum levels.

On 139 diverse dates from March 28, 2008 to January 7, 2009 inclusive, the undertaking reportedly failed to hold sufficient assets to meet its requisite minimum guarantee fund of E2.2 million. Throughout the period of non-compliance, the greatest shortfall in assets on any one date amounted to E141,000 and the mean shortfall amounted to E31,662.

The Financial Regulator reprimanded Creation Insurance and has required it to pay a fine of E26,600.

The Financial Regulator believes that the actions of the undertaking were not deliberate, that there was no loss or risk to policyholders and the undertaking has been closed to new business since June 30, 2004. The undertaking has fully cooperated with the Financial Regulator at all times during the investigation.

The Financial Regulator regards breaches of solvency requirements arising from a lack of prudent management, to be a contravention of important regulatory requirements.