Opinion of the European Central Bank of 28 September 2018 on the establishment of a national insurance claims database (CON/2018/43)
Date: 2018-09-28
Institutions: European Central Bank
Subjects: Ireland, central bank, data collection, indemnity insurance, insurance claim, statistics

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 28 September 2018 

on the establishment of a national insurance claims database 

(CON/2018/43) 

Introduction and legal basis 

On 20 July 2018 the European Central Bank (ECB) received a request from the Irish Minister for Finance 

(the  ‘Minister’)  for  an  opinion  on  the  Central  Bank  (National  Claims  Information  Database)  Bill  2018 

(hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning  of  the  European  Union  and  the  third  and  fourth  indents  of  Article 2(1)  of  Council  Decision 
98/415/EC1, as the draft law relates to the  Central Bank of Ireland (CBI) and the collection, compilation 

and distribution of monetary, financial, banking, payment systems and balance of payments statistics. In 

accordance  with  the  first  sentence  of  Article 17.5  of  the  Rules  of  Procedure  of  the  European  Central 

Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft law 

1.1  The purpose of the draft law is to improve transparency in relation to non-life insurance claims in 

Ireland.  As  noted  in  the  Minister’s  letter  accompanying  the  consultation  request,  the  overall 

purpose of the draft law is to improve the transparency around the causes of premium volatility and 
pricing in the Irish market for non-life insurance.2 To this end, the draft law provides the CBI with 

the additional general function of collecting and studying data from insurance undertakings on the 

income and expenditure associated with the carrying on of business of certain relevant classes of 
non-life insurance business.3  

1.2  The draft law constitutes the legislative response to the first report of the Irish Government’s Cost 

of Insurance Working Group (the ‘Working Group’). The Working Group’s objective was to identify 

and  examine  the  drivers  of  the  cost  of  insurance,  and  recommend  measures  to  address  the 

increasing  cost  of  insurance,  taking  account  of  the  need  to  ensure  a  financially  stable  insurance 

1  

2  

3  

Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

Letter  from  the  Minister  for  Finance  to  President  Draghi  of  16  July  2018  requesting  an  opinion  of  the  ECB  in 
accordance with Articles 127(4) and 282(5) of the TFEU. See also the Report on the Cost of Motor Insurance of the 
Cost  of  Insurance  Working  Group  (January  2017)  (the  ‘Report  on  the  Cost  of  Motor  Insurance’)  published  on  the 
website of the Irish Department of Finance at www.finance.gov.ie.  
See section 8 of the draft law. 

 
 
 
 
                                                 
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sector4.  One  key  recommendation  of  the  report  was  to  create  a  national  claims  information 

database in the expectation that greater transparency in the claims environment will allow for the 

identification of trends and appropriate policy responses. This in turn should lead to greater stability 

in  the  pricing  of  motor  insurance  and  should  help  prevent  cycles  both  up  and  down  that  have 

occurred  regularly  in  the  Irish  market  in  the  past.  It  should  also  better  facilitate  potential  new 
entrants to the market5. 

1.3  The draft law gives the CBI certain responsibilities to specify the scope  of application of the draft 

law.  The  CBI  is  tasked  with  making  regulations  to  specify  which  classes  of  non-life  insurance 
should  be  deemed  relevant  for  the  purposes  of  the  draft  law.6  To  assist  in  the  exercise  of  this 

specification  function  by  the  CBI,  the  draft  law  provides  policy  guidance  on  the  draft  law’s 
objectives and principles.7  In  addition,  the CBI is also given the function of  making regulations to 
specify when non-life insurance risks should be categorised as being ‘based in the State’.8 

1.4  The  draft  law  sets  out  examples  of  the  types  of  data  which  the  CBI  may  collect  from  insurance 

undertakings.  These  include  data  on  insurance  premiums  and  other  income;  the  extent  of  the 

insurance  undertaking's  exposure  to  risks;  the  insurance  undertaking’s  costs,  such  as  business 

expenses and commissions; the number and nature of relevant claims; details of the costs borne 

and  provisions  associated  with  relevant  claims;  the  amount  paid  to  finally  resolve  or  dispose  of 

claims;  the  costs  incurred  when  using  various  settlement  channels,  i.e.  the  different  steps  and 

proceedings to resolve or dispose of claims; and details of large claims with a settlement or award 
value  which  is  not  less  than  EUR  150,000.9  When  providing  this  data  to  the  CBI,  the  draft  law 

requires insurance undertakings to use their best endeavours to transmit it in such a way that no 

individual is identifiable from it, and provides that, where an individual is identifiable, the CBI shall 
ensure that individual’s identity is not disclosed.10  

1.5  The draft law also provides for the CBI to publish a report on the data it collects at least annually.11 

The  report  should  serve  certain  defined  purposes  set  out  in  the  draft  law,  which  may  include  the 

following: increasing the level of information on the relationship between insurance premiums and 

related costs; identifying current and emerging trends within relevant non-life insurance business; 

identifying the factors that cause price movements; and presenting a series of statistical analyses 

of (i) income and costs related to providing relevant non-life insurance business; (ii) information on 
relevant claims; and (iii) each particular settlement channel used in respect of such claims.12 The 

Working Group gave close consideration to the fact that the CBI’s report would present aggregated 

rather  than  granular,  claim-by-claim  data.  It  was  of  the  view  that  this  would  address  anti-

competitive  issues  by  protecting  commercially  sensitive  proprietary  information  on  claims  costs 

4  
5  
6  
7  
8  
9  
10  
11  
12  

See the Report on the Cost of Motor Insurance, p. 9. 
See the Report on the Cost of Motor Insurance, p. 11. 

See section 6(3) of the draft law. 
See section 6(1) of the draft law. 

See section 7(1) of the draft law. 
See section 8(4), together with sections 4(1) and 4(2) of the draft law. 
See section 8(3) of the draft law. 

See section 8(6) of the draft law. 
See section 8(7) of the draft law. 

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whilst  providing  useful  information  to  potential  new  market  entrants  without  acting  as  a  barrier  to 

entry. The Working Group also recognised that the CBI’s reporting and analysis of collected data 

would need to be delivered in a way that mitigated the risk of insurance undertakings directly using 

the  report  to  derive  prices.  This  consideration  could  detract  from  the  public  benefit  of  such  a 
report13.  As  such,  the  ECB  understands  that  the  CBI’s  report  under  the  draft  law  will  enhance 

transparency  regarding  claims  costs  and  trends  but  it  is  not  intended  that  the  CBI  would  directly 

address pricing and/or competition issues in the insurance market. 

1.6  The draft law makes the necessary adjustments to the CBI’s supervision and enforcement powers 

to  permit  it  to  designate  breaches  and  contraventions  of  the  draft  law  and  to  ensure  that  it  can 
require by notice the information it needs to collect to carry out its functions thereunder.14 

1.7  The draft law expressly provides that the CBI may not use funds from its own resources to defray 
expenses it incurs when collecting and studying data from insurance undertakings.15 Rather, these 

expenses  are  to  be  met,  in  the  first  place,  by  the  industry  levies  to  be  paid  by  insurance 
undertakings16 and, if necessary, supplemented by monies requested from the Minister. The draft 

law lays down the process by which the CBI may request additional funding from the Minister, in 

the  event  that  it  is  unable  to  defray  all  of  its  expenses  from  the  industry  levies.  Where  the  CBI 

reasonably  apprehends  that  there  will  be  a  shortfall  between  the  industry  levies  and  its  data 

collection  and  analysis  expenses  or  there  is  an  insufficiency  of  funds  for  another  reason,  it  may 

request the Minister to advance the amount of the shortfall. The Minister in turn may advance the 

sums he or she thinks proper to enable the CBI to defray all of its expenses arising from its function 

under  the  draft  law.  Sums  advanced  by  the  Minister  can  be  subject  to  repayment,  interest  and 
other terms set by the Minister after consulting the CBI.17 

1.8  Finally, the draft law also permits the CBI to disclose data it has collected to persons upon request 

unless the  data  would identify an insurance undertaking or individual or where the CBI considers 

that the legitimate interests of consumers or an undertaking would be prejudiced, where the data is 

not complete or sufficiently verified or where there are any other exceptional circumstances.  

2. 

Conferral of new task on the CBI 

2.1  New task of the CBI 

2.1.1  The draft law confers on the CBI the general function of collecting, studying and reporting data from 

insurance undertakings on the income and expenditure associated with the carrying on of business 
of  certain  relevant  classes  of  non-life  insurance  business18.  The  CBI  is  the  relevant  competent 

authority for the prudential supervision of insurance undertakings as well as for the supervision of 

their  business  conduct  and  collects  a  range  of  information  from  insurance  undertakings  in  the 

13  
14  
15  
16  
17  
18  

See the Report on the Cost of Motor Insurance, pp. 81-82. 

See sections 9 and 10 of the draft law. 
See section 11(1) of the draft law. 
See section 11(2) of the draft law and section 32D of the Central Bank Act, 1942. 

See sections 11(3) and 11(4) of the draft law. 
See section 8 of the draft law. 

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exercise  of  its  supervisory  functions.  It  also  has  a  consumer  protection  mandate  with  respect  to 

insurance  undertakings  operating  in  Ireland.  However,  the  CBI  currently  has  no  specific 

responsibilities  to  ensure  transparency  regarding  the  volatility  of  non-insurance  claims  costs  and 

how these relate to insurance premium levels or to collect and analyse this type of data in the non-

life  insurance  sector.  As  such,  the  draft  law  creates  a  new  responsibility  of  the  CBI  in  relation  to 

insurance undertakings and the transparency of costs and pricing in the non-life insurance market. 

The draft law therefore confers a new task upon the CBI.  

2.1.2  The ECB underlines that a proposed conferral of new tasks on a national central bank (NCB) in the 

European  System  of  Central  Banks  must  be  assessed  against  the  prohibition  on  monetary 

financing under Article 123 of the Treaty. For the purposes of that prohibition, Article 1(1)(b)(ii) of 
Council  Regulation  (EC)  No 3603/9319  defines  ‘other  type  of  credit  facility’,  inter  alia,  as  ‘any 

financing of the public sector’s obligations vis-à-vis third parties’. 

Ensuring that Member States implement a sound budgetary policy is one of the key objectives of 
the  monetary  financing  prohibition,  which  may  not  be  circumvented20.  Therefore,  the  task  of 

financing  measures,  which  are  normally  the  responsibility  of  the  Member  States,  and  which  are 

financed from their budgetary sources rather than by the NCBs, must not be entrusted to NCBs. To 

decide what constitutes financing of the public sector’s obligations vis-à-vis third parties, which can 

be translated as the provision of central bank financing outside the scope of central bank tasks, it is 

necessary  to  carry  out,  on  a  case-by-case  basis,  an  assessment  of  whether  the  task  to  be 

undertaken  by  an  NCB  is  a  central  bank  task  or  a  government  task,  i.e.  a  task  within  the 

responsibility  of  the  Member  States.  In  other  words,  adequate  safeguards  must  be  in  place  to 

ensure that circumventions of the objective of the monetary financing  prohibition of maintaining a 

sound budgetary policy of Member States do not take place. 

2.1.3  As part of its discretion in the exercise of its duty, on the basis of Article 271(d) of the Treaty and 

Article 35.6 of the Statute of the European System of Central Banks and of the European Central 

Bank (hereinafter the ‘Statute of the ESCB’), to ensure that NCBs honour the obligations laid down 

by the Treaty, the Governing Council has endorsed safeguards of that kind in the form of criteria for 

determining what may be seen as falling within the scope of a public sector’s obligation within the 

meaning of Article 1(1)(b)(ii) of Regulation (EC) No 3603/93 or, in other words, what constitutes a 

government task as follows: 

First, central bank tasks are in particular those tasks that are  related to the tasks that have been 

conferred upon the ECB and the NCBs by the Treaty and the Statute of the ESCB. These tasks are 

mainly defined in Article 127(2), (5) and (6) and Article 128(1) of the Treaty, as well as Article 22 

and Article 25.1 of the Statute of the ESCB. 

Second, as Article 14.4 of the Statute of the ESCB allows NCBs to perform ‘other functions’, new 

tasks, i.e. tasks that are not related to tasks that have been conferred upon the ECB and the NCBs, 

19  

20  

Council  Regulation  (EC)  No  3603/93  of  13  December  1993  specifying  definitions  for  the  application  of  the 
prohibitions referred to in Articles 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1). 

Article  123  of  the  Treaty  also  serves  the  objective  of  maintaining  price  stability  and  reinforces  central  bank 
independence. 

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are  not  precluded  per  se.  However,  new  tasks  that  are  undertaken  by  an  NCB  and  which  are 

atypical of NCB tasks or which are clearly discharged on behalf of, and in the exclusive interest of 

the government or of other public sector entities should be considered government tasks. 

Third, an important criterion for qualifying a new task as atypical of an NCB task or as being clearly 

discharged  on  behalf  of  and  in  the  exclusive  interest  of  the  government  or  other  public  sector 

entities  is  the  impact  of  the  task  on  the  institutional,  financial  and  personal  independence  of  that 

NCB. 

In particular, the following aspects should be taken into account: 

(a)   whether  the  performance  of  the  new  task  creates  conflicts  of  interest  with  existing  central 

bank tasks which are not adequately addressed and does not necessarily complement those 

existing  central  bank  tasks.  If  a  conflict  of  interest  arises  between  existing  and  new  tasks, 

sufficient  safeguards  to  mitigate  that  conflict  should  be  in  place.  The  complementarity 

between a new task and the existing central bank tasks should not be interpreted broadly, so 

as  to  lead  to  the  creation  of  an  indefinite  chain  of  ancillary  tasks.  Such  complementarity 

should be examined in relation to the financing of those tasks; 

(b)  whether without new financial resources the performance of the new task is disproportionate 

to  the  NCB’s  financial  or  organisational  capacity,  and  may  have  a  negative  impact  on  the 

capacity to perform properly the existing central bank tasks; 

(c)   whether the  performance  of the  new  task fits into  the institutional set-up  of the  NCB in  the 

light of central bank independence and accountability considerations; 

(d)  whether the performance of the new task harbours substantial financial risks; 

(e)  whether the performance of the new task exposes the members of the NCB decision-making 

bodies  to  political  risks  which  are  disproportionate  and  may  also  have  an  impact  on  their 

personal  independence  and,  in  particular,  on  the  guarantee  of  term  of  office  set  out  in 

Article 14.2 of the Statute of the ESCB. 

2.1.4  On the basis of the criteria set out above, the following paragraphs assess whether the new task of 

the CBI is in line with the prohibition of monetary financing. 

2.2  Tasks related to the tasks conferred upon the ECB and the NCBs by the Treaty and the Statute of 

the ESCB  

The collection and analysis of data on the costs and income associated with insurance provision in 

order to ensure pricing transparency in insurance markets is not expressly mentioned among any 

of the basic central banking tasks listed in Article 127(2) or (5) of the Treaty or otherwise conferred 

upon  the  NCBs  by  the  Statute  of  the  ESCB.  Under  Article  127(6)  of  the  Treaty,  the  Council  may 

confer  specific  tasks  upon  the  ECB  concerning  policies  relating  to  the  prudential  supervision  of 

credit institutions and other financial institutions but not insurance undertakings, and the new task 

proposed to be conferred  upon the CBI does not concern the prudential supervision of insurance 

undertakings. Against this backdrop, the new task conferred on the CBI under the draft law is not 

directly related to the tasks conferred upon the ECB and the NCBs by the Treaty and the Statute of 

the ESCB. Consequently, a careful assessment of the conferral of this task on the CBI is required 

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in  order  to  determine  whether  it  constitutes  a  government  task,  and  whether  the  related  funding 
gives rise to monetary financing concerns21.  

2.3  Tasks which are atypical of NCB tasks  

2.3.1  The new task conferred on the CBI by the draft law, i.e. to collect and analyse  data  on the costs 

and  income  associated  with  the  non-life  insurance  sector,  is  related  to  the  business  of  non-life 

insurance  undertakings,  the  transparency  and  integrity  of  the  non-life  insurance  market  and, 

perhaps, the protection of consumers of non-life insurance services more broadly.  

2.3.2  It is necessary to analyse whether this new task is atypical of NCB tasks. The role of prudential and 

conduct of business supervision of insurance undertakings is currently fulfilled by numerous ESCB 
NCBs.22  In  addition,  many  ESCB  NCBs  fulfil  consumer  protection  tasks  in  the  area  of  financial 
services.23 The CBI is already responsible for the prudential supervision of insurance undertakings 

as well as supervision of their business conduct. It also has a broad consumer protection mandate 
in the field of financial services, including insurance24. The Central Bank Acts 1942 – 2015 provide 

the  CBI  with  investigatory,  supervisory  and  enforcement  powers  designed  to  ensure  that  it  can 

carry  out  its  prudential  and  consumer  protection  mandates.  In  the  case  of  the  draft  law,  it 

specifically  expands  the  CBI’s  existing  supervision  and  enforcement  powers  to  permit  it  to 

designate breaches and contraventions of the draft law and to ensure that it can require by notice 

the information it needs to collect to carry out its function thereunder.  

2.3.3  In addition, in the exercise of its supervisory functions, the CBI also collects a range of information 

from  insurance undertakings. Indeed,  it is required  under Directive 2009/138/EC of the  European 
Parliament  and  of  the  Council25  (‘Solvency  II’)  to  publish  aggregate  harmonised  data  on  insurers 
that  is  consistent  and  comparable  with  other  insurance  supervisors  in  the  European  Union26  and 

other ESCB NCBs which  act as prudential supervisors of insurance undertakings are  necessarily 

subject to the same obligations under their national laws implementing Solvency II. In addition, the 

CBI, like all other NCBs in the euro area, is responsible for collecting data under Regulation (EU) 
No  1374/2014  of  the  ECB  on  statistical  reporting  requirements  for  insurance  corporations27.  In 

general, however, this data is merely derived from data already collected for supervisory purposes 

by national competent authorities for insurance undertakings pursuant to Solvency II. The scope of 

21  

22  

23  

24  
25  

26  

27  

See,  for  example,  paragraph  3.4.1  of  Opinion  CON/2017/12,  paragraph  2.2.1  of  Opinion  CON/2017/32, 
paragraph 3.1 of Opinion CON/2017/43 and paragraph 3.1 of Opinion CON/2017/52. All ECB opinions are published 
on the ECB’s website at www.ecb.europa.eu. 

See for example, paragraph 3.1 of Opinion CON/2012/61, paragraph 2.2 of Opinion CON/2011/46, paragraph 2 of 
Opinion CON/2010/33, paragraph 2 of Opinion CON/2010/4, and paragraphs 6 to 8 of Opinion CON/2003/23.  
See also paragraph 3.3.4.2 of Opinion CON/2016/54, paragraphs 4.3 and 4.4 of Opinion CON/2016/34, paragraphs 
3.3 and 3.4 of Opinion CON/2015/54 and paragraph 3.1 of Opinion CON/2015/21.  
See, in particular, sections 5A(1)(f) and 6A(2)(b) of the Central Bank Act 1942 (as amended).  
Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and 
pursuit of the business of Insurance and Reinsurance (OJ L 335, 17.12.2009, p. 1) (‘Solvency II’). 
The  first  batch  of  Solvency  II-based  data  was  published  by  the  CBI  in  August  2017  covering  2016  (Aggregate 
Statistical Data). The CBI previously published publically available data it collected from the insurance industry under 
the  Solvency  I  regime,  including  on branches  and individual  firms,  in  the  annual  ‘Insurance  Statistics  -  Blue  Book’ 
(link).  

Regulation (EU) No 1374/2014 of the ECB of 28 November 2014 on statistical reporting requirements for insurance 
corporations (ECB/2014/50) (OJ L 366, 20.12.2014, p. 36). 

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data  collected  and  reported  in  this  context  is  therefore  no  broader  than  that  required  under 

Solvency II. 

2.3.4  However,  while  the  CBI,  like  other  NCBs,  already  collects  data  on  insurance  undertakings 

supervised  by  it  in  the  supervisory  context  and  reports  it  for  statistical  purposes  to  the  ECB 

pursuant to Regulation (EU) No 1374/2014, the draft law serves a very different purpose compared 

to the CBI’s existing prudential supervision of non-life insurance undertakings or statistical reporting 

under  Regulation  (EU)  No  1374/2014.  In  contrast  to  the  CBI’s  supervisory  goals  of  monitoring 

insurance  undertakings’  capital,  governance  and  risk  management,  the  ultimate  goal  of  the  draft 

law  is  to  improve  transparency  in  relation  to  pricing  and  trends  in  the  non-life  insurance  market. 

The  draft  law  is  therefore  related  to  the  integrity  of  the  non-life  insurance  business,  and  not  the 

CBI’s prudential supervision of those insurance undertakings or the statistical reporting to support 

the  ECB  in  carrying  out  monetary  and  financial  analysis  under  Regulation  (EU)  No  1374/2014. 

Indeed,  no  other  Member  State  has  assigned  to  an  ESCB  member  a  similar  mandate  for  data 

collection  in  the  non-life  insurance  sector  institutions  for  the  purposes  similar  to  those  under  the 
draft law.28 While the CBI’s new task can, perhaps, be seen as related to its consumer protection 

mandate,  the  draft  law’s  core  purpose  to  improve  pricing  transparency  is  not  primarily  related  to 

consumer  protection.  Rather,  it  will  necessarily  have  implications  for  the  operation  of  the  market, 

including  the  competitiveness  of  pricing  between  non-life  insurance  undertakings.  Although  the 

CBI’s data-collection and analysis tasks under the draft law do not give it any mandate with regard 

to  ensuring  or  enhancing  competition  or  creating  policy  on  competition  in  the  Irish  non-life 
insurance market, which is welcomed by the ECB29, the basic purpose of the draft law to enhance 

transparency of pricing in the Irish market for non-life insurance diverges from and extends beyond 

the purpose of the CBI’s existing roles in prudential supervision and consumer protection.  

2.3.5  Taking into account the fact that the purpose of the draft law is related neither to the CBI’s role in 

the prudential supervision of insurance undertakings nor its existing data collection tasks in relation 

to  insurance  undertakings,  and  only  partially  and  indirectly  related  to  the  CBI’s  role  in  consumer 

protection, as well as the fact that no other Member State has assigned to an ESCB central bank a 

similar task, it appears that, on balance, the new task under the draft law is atypical of NCB tasks. 

2.4  Tasks clearly discharged on behalf of and in the exclusive interest of the government 

For the same reasons, the new task conferred by the draft law appears to be only partially linked to 

the  CBI’s  existing  tasks  and  mandates.  On  balance,  the  new  task  under  the  draft  law  would 

therefore be regarded as being discharged primarily in the interest of the government. 

28  

29  

The Czech National Bank has responsibility for collecting data on non-life insurance claims pursuant to the Act No. 
277/2009 Coll., on Insurance, as amended (the ‘Insurance Act’) in certain very specific circumstances. Following an 
extraordinary natural or other disaster and a declaration of a state of danger or emergency, the Czech National Bank 
may  require  insurance  undertakings  to  provide  it  with  general  information  on  the  number  and  amount  of  claims 
reported  and  on  the  amount  of  the  indemnities  paid  out  for  the  loss  of  or  damage  to  property  which  serves  to 
safeguard  vital functions in  the  state (Section 132 (1) of  the Insurance Act). The Czech National Bank passes  the 
information  in  summary  form  to  the  Ministry  of  Finance.  While  the  process  of  data  collection  on  claims  relating  to 
natural  disasters  is  somewhat  similar  to  that  proposed  for  the  CBI  under  the  draft  law,  the  statistical  collection  on 
insurance  claims  in  the Czech Republic does not appear  to serve  the  same purpose as  the draft  law  (to enhance 
transparency in the market), and does not involve the same analysis of the data on claims in the reporting phase. 
See paragraph 2.2 of Opinion CON/2018/10, paragraph 3.3.4.3.1 of Opinion CON/2016/54.  

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2.5  Extent to which performance of the new task creates conflicts of interest with existing central bank 

tasks 

ECB-PUBLIC 

As noted in Section 2.3.2, the CBI is the competent authority responsible for the authorisation and 

prudential  supervision  of  insurance  undertakings  and  therefore  already  has  insurance  data 

collection  obligations  under  the  national  implementation  of  Solvency  II  requirements.  In  addition, 

the  CBI  has  a  consumer  protection  mandate  with  respect  to  insurance  undertakings  operating  in 

Ireland.  Therefore,  it  is  arguable  that  the  new  task  partially  complements  other  similar  existing 

supervisory,  insurance  data  collection  and  consumer  protection  tasks  of  the  CBI.  On  the  other 

hand, as  noted in Section 2.1.3(a), the complementarity between a new task and  existing central 

bank tasks should not be interpreted broadly, so as to lead to the creation of an indefinite chain of 

ancillary  tasks.  The  assignment  of  new,  long-term  tasks  to  NCBs,  including  the  CBI,  should 

therefore be approached with a high degree of caution in order to avoid such an indefinite chain of 

ancillary tasks. In addition, as with other tasks related to consumer protection, sufficient mitigation 

measures  must  be  put  in  place  to  ensure  that  in  the  event  of  a  conflict  of  interest,  supervisory 
considerations prevail30.  

In  addition,  the  draft  law’s  ultimate  purpose  to  improve  pricing  transparency  has  a  market-

functioning 

focus, 

including 

the  competitiveness  of  pricing  between  non-life 

insurance 

undertakings.  Given  the  data-based  nature  of  the  CBI’s  function  under  the  draft  law  to  collect, 

analyse and report on data from the Irish non-life insurance sector, the draft law does not, on the 

face of it, give the CBI any role with regard to ensuring or enhancing competition or creating policy 

on competition in the Irish non-life insurance market. However, it is important to reiterate that the 

ECB  discourages  the  concentration  of  decision-making  powers  in  the  areas  of  competition  and 
banking  supervision  in  one  body31  and  the  same  principles  would  apply  to  the  promotion  of 

transparency  of  pricing  in  the  Irish  market  for  non-life  insurance  products.  In  fact,  the  ECB  has 

previously  welcomed  draft  national  laws  transferring  the  responsibilities  for  the  enforcement  of 
competition  policy  in  the  banking  sector  away  from  the  NCB  to  a  national  competition  authority32 

and discouraged the concentration of decision-making powers in the areas of antitrust and banking 
supervision  in  one  body33.  In  doing  so,  the  ECB  highlighted  the  need  to  balance  the  potentially 
conflicting  objectives  of  market  competition  and  financial  stability34,  which  applies  equally  to  the 

promotion  of  transparency  of  pricing  for  non-life  insurance  products.  While  coordination  is 

necessary to avoid an overly complex framework for supervised entities, it would seem appropriate 
to  maintain  a  clear  distinction  between  procedures  that  are  pursuing  distinct  public  interests,35  in 
particular for procedures leading to antitrust and banking or insurance supervision decisions36. For 

30  

31  
32  
33  
34  
35  
36  

See  paragraph  3.4.3  of  Opinion  CON/2018/10,  paragraph  3.1  of  Opinion  CON/2015/21  and  paragraph  2.2.2  of 
Opinion CON/2016/31. 
See paragraph 3.3.4.3.1 of Opinion CON/2016/54 and paragraph 4 of Opinion CON/2008/44. 

See paragraph 3.3.4.3.1 of Opinion CON/2016/54 and paragraph 14 of Opinion CON/2004/16. 
See paragraph 3.3.4.3.1 of Opinion CON/2016/54 and paragraph 4 of Opinion CON/2008/44. 
See paragraph 3.3.4.3.1 of Opinion CON/2016/54 and paragraph 3.3 of Opinion CON/2006/51. 

See paragraph 3.3.4.3.1 of Opinion CON/2016/54 and paragraph 14 of Opinion CON/2004/16. 
See paragraph 3.3.4.3.1 of Opinion CON/2016/54 and paragraph 8 of Opinion CON/2005/58. 

8 

                                                 
ECB-PUBLIC 

that  reason  the  ECB  considers  that  in  these  circumstances  draft  national  laws  should  reflect  the 
principle of allocating powers to authorities in accordance with their respective objectives37.  

2.6  Extent to which performance of the  new task is disproportionate to the  financial  or  organisational 

capacity of the CBI 

2.6.1  The principle of financial independence requires that Member States may not put their NCBs in a 

position where they have insufficient resources to carry out both their ESCB-related tasks and their 

national tasks from an operational and financial perspective. In this regard, the ECB welcomes the 

fact that the draft law specifically addresses the financing of additional expenses resulting from the 

CBI’s new function under the draft law. However, given that the new task is atypical of NCB tasks 

and performed primarily in the interest of the government, further clarifications are needed so as to 

ensure that the  CBI  is  adequately remunerated on  a regular  and  prompt basis as the costs arise 

from  its  collection  and  analysis  of  data  on  the  costs  and  income  associated  with  insurance 

provision. 

2.6.2  The draft law expressly provides that the CBI may not use funds from its own resources to defray 
expenses it incurs when collecting and studying data from insurance undertakings.38 Rather, these 

expenses  are  to  be  met  by  the  industry  levies  to  be  paid  by  insurance  undertakings  under  the 
Central  Bank  Acts  1942-201539.  In  addition,  if  the  CBI  anticipates  that  the  industry  levies  will  not 

suffice to defray  all  of its expenses  from the  data collection and  analysis function  under the  draft 

law  in  any  given  year,  it  may  request  the  shortfall  from  the  Minister.  The  Minister  in  turn  may 

advance  such  sums  as  he  or  she  thinks  proper  to  enable  the  CBI  to  defray  all  of  its  expenses, 

arising in that year, associated with the CBI’s functions under the draft law. The draft law therefore 

retains an element of discretion for the Minister in the advancing of sums requested by the CBI to 

defray  its  costs.  In  addition,  the  draft  law  provides  that  sums  advanced  by  the  Minister  can  be 
subject to repayment, interest and other terms set by the Minister after consulting with the CBI.40 It 

is  understood  that  the  provision  for  repayment  terms  may  be  intended  to  cover  circumstances 

where  the  CBI  anticipated  shortfalls  which  did  not  materialise,  or  where  levy  payments  were 

delayed but subsequently paid in full. These repayment, interest and other terms are, however, not 

specified further or limited in the draft law.  

2.6.3  As the CBI’s new task under the draft law is not a central bank task and is performed primarily in 

the  interest  of  the  government,  the  ECB  invites  the  consulting  authority  to  clarify  through 

appropriate amendments to the draft law that any anticipated or actual shortfall of funds to defray 

the  CBI’s  expenses  under  the  draft  law  will  always  be  granted  by  the  Minister  on  a  regular  and 

prompt  basis as the costs  arise  to  ensure that  the  CBI does not  have  to  fund  the cost of  its task 

under the draft law from its own funds. In addition, it could be helpful to clarify that repayment terms 

for amounts advanced by the Minister are, in all cases, subject to the overarching principle that the 

CBI may not use funds from its own resources to defray its expenses arising under the draft law. 

37  
38  
39  
40  

See paragraph 3.3.4.3.1 of Opinion CON/2016/54 and paragraph 4 of Opinion CON/2007/17.  
See section 11(1) of the draft law. 

See section 11(2) of the draft law and section 32D of the Central Bank Act, 1942. 
See sections 11(3) and 11(4) of the draft law. 

9 

                                                 
ECB-PUBLIC 

2.7  Extent to which performance of the new task fits into the institutional set-up of the CBI, in the light 

of central bank independence and accountability considerations 

The  potential  impact  of  the  new  task  on  the  institutional,  financial  and  personal  independence  of 

the CBI must also be taken into consideration. 

2.8  Extent to which the performance of tasks harbours substantial financial risks  

The draft law does not contain any specific provisions on liability in relation to the exercise of the 

CBI’s  function  under  the  draft  law.  Nonetheless,  section  33AJ(2)  of  the  Central  Bank  Act  1942 

provides that specified officers and employees of the CBI are not liable for damages for anything 

done or omitted in the performance or purported performance or exercise of any of its functions or 

powers, unless it is proved that the act or omission was in bad faith. Given the data-based nature 

of the CBI’s function, to collect, analyse and report on data in the Irish non-life insurance sector, the 

draft law does not appear to expose the CBI to substantial financial risks. 

2.9  Extent to which the performance of the new task exposes members of the decision-making bodies 

of the CBI to disproportionate political risks and impacts on their personal independence  

The performance of the function conferred under the draft law does not appear to expose the CBI’s 

decision-making  bodies  to  any  disproportionate  political  risk  or  have  an  impact  on  their  personal 

independence. As mentioned in paragraph 2.3.2, the CBI is already responsible for the prudential 

supervision of insurance undertakings, the collection of data from insurance undertakings and has 

a consumer protection mandate with respect to insurance undertakings in Ireland. In addition, it is 

understood that the draft law’s allocation of data-collection and analysis tasks does not create any 

new mandate for the CBI to ensure or enhance competition or to create competition policy for the 

Irish non-life insurance market. 

2.10  Conclusion 

The new task of the CBI of collecting and studying data from insurance undertakings on the income 

and expenditure associated with the carrying on of business of certain relevant classes of non-life 

insurance business cannot be regarded as a central bank task, in the sense that the purpose of the 

draft  law  is  not  related  to  the  CBI’s  role  in  the  statistical  reporting  in  relation  to  insurance 

undertakings to support the ECB in carrying out monetary and financial analysis, nor to the CBI’s 

role  in  the  prudential  supervision  of  insurance  undertakings,  and  is  only  partially  and  indirectly 

related  to  the  CBI’s  role  in  consumer  protection.  The  main  purpose  of  the  CBI’s  new  task  is  to 

improve the transparency around the causes of premium volatility and pricing in the Irish market for 

non-life insurance. No other Member State has assigned a similar task to an ESCB central bank. 

As the CBI’s new task under the draft law is not a central bank task, but rather a task that is related 

to  the  proper  functioning  of  pricing  in  the  non-life  insurance  market  in  Ireland,  and  is  therefore 

performed  primarily  in  the  interest  of  the  government,  the  consulting  authority  is  invited  to  clarify 

through appropriate amendments to the draft law that any anticipated or actual shortfall of funds to 

defray the CBI’s expenses will always be granted by the Minister on a regular and prompt basis as 

the costs arise to ensure that the CBI does not have to fund the cost of its task under the draft law 

from  its  own  funds.  In  addition,  it  could  be  helpful  to  clarify  that  repayment  terms  for  amounts 

10 

advanced by the Minister are, in all cases, subject to the overarching principle that the CBI may not 

use funds from its own resources to defray its expenses under the draft law. 

ECB-PUBLIC 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 28 September 2018. 

[signed] 

The President of the ECB 

Mario DRAGHI 

11