Significant and Imminent change to the investment business activities - IIA

May 17, 2018

Important Information for firms holding Investment Business Authorisation under the Investment Intermediaries Act, 1995 (the IIA)

The transposition by Ireland of the EU Insurance Distribution Directive[1] (the IDD) later this year is likely to have significant implications for those firms authorised by the Institute under the IIA, including removing the need for certain firms to hold IIA authorisation.

As part of the transposition of the IDD, it is anticipated that ‘insurance policies’ will be removed from the scope of the IIA and therefore from the scope of the Institute’s Investment Business Regulations. This is expected to apply from 1 October 2018.

When the IDD Regulations take effect, firms which are involved actively in advising on or arranging insurance products, including insurance-based life and pension products, must be registered for such activities directly by the Central Bank of Ireland.

Firms should note that where a firm introduces or refers a client to a third party for the purposes of arranging the purchase of an insurance product and that firm has no further role in the transaction, that firm will not be required to be registered with the Central Bank and will continue to be authorised by the Institute until 1 October 2018.  This is because the act of introduction or referral in respect of an insurance product does not fall within the definition of 'insurance distribution' and is not subject to the IDD.

Furthermore, the IDD does not apply to persons with another professional activity, such as accountants, who provide advice on insurance cover on an incidental basis in the course of that other professional activity, nor to the mere provision of information of a general nature on insurance products, provided the purpose of that activity is not to help the customer conclude or fulfil an insurance contract, e.g., preparing calculations of the maximum amount a client might contribute to a pension is not, of itself an authorisable activity.

So if a firm currently holds IIA authorisation from the Institute solely because it makes referrals to a third party for advice on or for the purpose of arranging  insurance-based products and does not conduct any other type of investment business, then that firm is likely to no longer require investment business authorisation from 1 October 2018.  However, this will be a matter for the firm to decide.

The scope of the IDD is confined to insurance products only.  Firms that currently hold investment business authorisation and make referrals to third parties in respect of other types of investments or for investment advice (e.g., to a stockbroker), or are active themselves in carrying on investment business will continue to require authorisation – either from the Institute or directly from the Central Bank in respect of such IIA activities.

What should authorised firms do now?

Each firm currently holding investment business authorisation from the Institute should review the activities it currently undertakes.  If those activities include advising on or arranging insurance products or are likely to do so in the future, then the firm will be required to register with the Central Bank in respect of such activities in accordance with the current Insurance Mediation Regulations (IMR) or the IDD regulations.

If the firm carries out the following activities as provided for in the IDD:

  • advising on, proposing, or carrying out other work preparatory to the conclusion of contracts of insurance, or
  • concluding such contracts, or
  • of assisting in the administration and performance of such contracts, in particular in the event of a claim,

including the provision of information concerning one or more insurance contracts in accordance with criteria selected by customers through a website or other media and the compilation of an insurance product ranking list, including price and product comparison, or a discount on the price of an insurance contract, when the customer is able to directly or indirectly conclude an insurance contract using a website or other media;

then you need to notify the Central Bank of Ireland in order to begin the process of receiving a registration under the IMR with the Central Bank. Please contact no later than close of business on Friday, 25th May 2018.   Any queries on the Central Bank application process should also be sent to    Once a firm has been registered under the IMR, it will continue to be registered once the IDD is implemented.

If the firm’s only investment business activity is referral to a third party for advice on or for the purpose of arranging insurance/insurance based pensions, and the firm has no further involvement, such activity will not require investment business authorisation, either from the Institute or from the Central Bank from 1 October 2018.  

 [1] Directive (EU) 2016/97 of the European Parliament and of the Council