Central Bank 2026 Regulatory And Supervisory Outlook – (Re)Insurers And Intermediaries

On 26 February 2026, the Central Bank of Ireland published its 2026 Regulatory and Supervisory Outlook (RSO), outlining the key trends and risks shaping the financial sector, as well as its regulatory and supervisory priorities for the year ahead.

For further information on the Central Bank's financial regulation priorities 2026, the global and domestic risk environment, risk themes and related drivers and supervisory priorities, please see our related article here and for other sector-specific information in the RSO please refer to our Knowledge page on the William Fry website.

Sectoral Focus – Insurance

In our sector specific articles, trends, risks and vulnerabilities are considered from a sectoral perspective in line with the Central Bank's supervisory approach. In this article, we look at the insurance industry and the key priorities and takeaways from the RSO for (re)insurers and intermediaries.

Planned supervisory activity by the Central Bank in 2026 will cover 5 focus areas for both (re)insurers and intermediaries, with particular focus on customer treatment and operational and cyber resilience. Notably, the RSO underscores that implementation of the new Consumer Protection Code 2025 (CPC 2025) will be a central pillar of supervisory engagement across the insurance sector.

For (re)insurers, supervisory activities will include direct engagement with firms and individuals on prioritised risks, cross-sectoral risk assessments, thematic reviews, onsite inspections, review of regulatory submissions, and cross-industry data‑gathering through supervisory questionnaires. For the retail intermediary sector (including insurance intermediaries), the Central Bank will continue its more indirect, thematic, and data‑driven supervisory approach, using cross‑sectoral reviews and targeted, risk‑based interventions rather than routine direct engagement.

Below is a detailed look at the Central Bank's approach in each of the 5 areas of focus for A)  Insurance and Reinsurance and B) Insurance Intermediaries, respectively.

1. Key Supervisory Focus Areas – Insurance & Reinsurance

Focus Area 1: Treatment of Customers

The Central Bank highlights that customer treatment remains a core supervisory focus, reflecting the elevated consumer detriment risks identified in its sectoral assessment. Insurers are expected to ensure that products are properly designed, approved, and continuously monitored to meet target market needs across all jurisdictions. Senior management are required to take clear ownership of product governance, ensuring suitability, fair value and appropriate distribution. Clear and comprehensible customer information is also cited as essential. In addition, rising premiums continue to highlight affordability pressures and protection gaps, particularly in climate‑related exposures, reinforcing the need for effective, customer‑focused solutions.

The main planned supervisory activities include:

• Thematic review of customer service levels in the domestic non‑life sector and thematic review of complaints handling across the domestic life and non‑life sectors (continuing from 2025).
• Thematic review of new‑business administration processes in the domestic life sector, focusing on the adequacy of internal controls to ensure policies are issued in line with requirements (continuing from 2025).
• Thematic review of customer information practices in the domestic life sector, and thematic review of the identification and treatment of vulnerable customers in that sector.
• Cross‑sectoral thematic review of commission arrangements  in intermediary‑sold products and services, assessing how these arrangements operate to secure customers' best interests.
• Thematic review of product oversight and governance in the international insurance sector, with a particular focus on value for money for certain product types.
• Thematic review of in‑force business administration processes, including claims handling in the domestic non‑life sector, and claims, surrenders and switches in the domestic life sector.

Focus Area 2: Financial Resilience

Although the Central Bank acknowledges that the Irish insurance sector continues to demonstrate strong solvency positions, insurers are operating in an environment marked by geopolitical tension, market volatility and evolving risk drivers. Maintaining robust financial resilience, therefore, remains essential, with prudent pricing, underwriting and reserving forming the foundation of sound risk management.

The main planned supervisory activities include:

• Issuing a Solvency II Review survey to all (re)insurers other than captives, assessing the expected impact of Solvency II changes and identifying firms intending to apply for proportionality measures. The survey will be issued in H1 2026, followed by assessment and engagement in H2 2026.
• Supervisory review of investment risk in the domestic non‑life sector to evaluate insurers' consideration of, and responsiveness to, geopolitical risks, including the effectiveness of investment portfolio oversight.
• Ongoing monitoring of resilience across all sectors, including assessment of stress scenarios and supervisory engagement on material shifts in the external environment.
• Cross‑sectoral review of pricing, underwriting and reserving practices for international (re)insurers, considering the implications of heightened geopolitical risks, market softening and other emerging risk factors.

Focus Area 3: Digitalisation and Artificial Intelligence

The Central Bank notes that digital transformation is accelerating across the insurance sector, and while technologies such as AI offer efficiency gains and improved customer experience, they also introduce new prudential, operational and conduct risks. The Central Bank expects insurers to ensure that their adoption of new technologies supports fair pricing, appropriate reserving and strong consumer protection in line with its broader supervisory priorities.

The main planned supervisory activities include:

• Engaging directly with insurers to assess their current and planned use of AI, with a view to understanding the implications for business models, risk management and governance frameworks.
• Conducting broader stakeholder engagement consistent with the Central Bank's innovation agenda, supporting responsible technological development that serves evolving customer needs while ensuring robust oversight.
• Supporting the effective implementation of the EU AI Act, integrating its requirements into supervisory strategies across all insurance sectors.

Focus Area 4: Climate Change and Sustainability

The Central Bank highlights that climate‑related risks, namely, physical, transition and litigation risks, continue to shape the long‑term risk profile of (re)insurers, affecting business models, underwriting strategies and capital planning. These risks span multiple underwriting cycles and have material strategic implications, reinforcing the need for firms to strengthen their assessment, management, and governance of climate exposures.

The main planned supervisory activities  include:

• Cross-sectoral review of how international (re)insurers have integrated climate change risks into their business model, strategy and underwriting practices.
• Targeted engagement with and provision of support to stakeholders in the development of a long-term and sustainable approach to addressing climate protection gaps, particularly for flood insurance risk in Ireland.
• Monitoring (re)insurers' progress in embedding climate risks within governance and risk management frameworks, including the ongoing assessment of how firms identify, measure and manage climate-related exposures.

Focus Area 5: Operational and cyber resilience

The Central Bank notes that many insurers have developed significant dependencies on third‑party and intra‑group service providers for critical functions, heightening vulnerabilities within their operational frameworks. Particular attention is required to ensure the continuity of critical or important business services (CIBS). Cyber‑attacks continue to present substantial operational risks, including the potential loss or misuse of customer data, and reinforce the need for firms to strengthen their digital and operational resilience.

The main planned supervisory activities include:

• Thematic review of domestic non‑life insurers to assess ICT risk management as part of firms' overall risk management systems, including evaluation of digital operational resilience and the extent to which the DORA framework is embedded. This work continues from 2025, with a number of firms selected each year.
• Thematic review of operational resilience in the international insurance sector, assessing firms' progress in implementing the Central Bank's Cross‑Industry Guidance on Operational Resilience.
• Thematic review of operational resilience in the domestic life sector, focusing on the Pillar 2 “respond and adapt” requirements under the Central Bank's Cross‑Industry Guidance on Operational Resilience.

2. Key Supervisory Focus Areas – Insurance Intermediaries

Focus Area 1: Operational and Cyber Resilience

The Central Bank notes that intermediaries place significant reliance on technology to deliver services to customers which increases vulnerability to cyber-attacks and outages. The supervisory focus mirrors that applied to insurers, emphasising the need for intermediaries to ensure the continuity of critical business services, safeguard customer data and for larger intermediaries to embed the requirements of DORA.

The main planned supervisory activities include:

• Supervisory assessment of DORA incident reporting and registers of information annual submission.
• Integrated supervision of larger retail intermediaries owned by health insurers, with a continued focus on digital and operational resilience.

Focus Area 2: Treatment of Customers

Securing customers' interest remains a core theme, reflecting the Central Bank's broader consumer protection agenda. Intermediaries are expected to ensure that advice, distribution practices and customer interactions consistently support fair outcomes, including for vulnerable customers. The Central Bank reiterates that intermediaries must demonstrate robust governance and oversight of the full customer journey.

The main planned supervisory activities include:

• Continuation of a cross-sectoral customer experience review, with a focus on the customer support that firms, including retail intermediaries / MGAs have for engaging with customers (continuing from 2025).
• Ensuring that the CPC 2025 and related guidance, including securing customers interests and consumers in vulnerable circumstances, will be embedded into supervisory practices and engagements.
• Cross-sectoral thematic review of the identification and treatment of customers in vulnerable circumstances (from Q3 2026 onwards).

Focus Area 3: Unregulated Products and Services

The Central Bank highlights continued growth in unregulated offerings facilitated through intermediary channels, increasing the potential for consumer harm where products fall outside the scope of formal regulatory protections. Intermediaries are expected to have strong governance structures to manage these risks, including clear precise outlines between regulated and unregulated activities.

The main planned supervisory activities include:

• Review of the provision of unregulated services and products by retail intermediaries, to understand how firms are meeting the new requirements and expectations in the Code and guidance.
• The provisions of the new Code and related guidance on unregulated activities, will be embedded into supervisory practices and engagements.

Focus Area 4: Commission and Remuneration

The RSO signals heightened supervisory scrutiny of commission and remuneration structures, including through the planned cross‑sectoral review of commission arrangements. The Central Bank aims to assess whether existing models operate in customers' best interests and whether firms can evidence appropriate governance, transparency and control over remuneration‑linked risks.

The main planned supervisory activities include:

• A cross-sectoral review of a range of commission arrangements in the sale of products and services to customers through intermediaries, to understand how they are working to secure customers' best interests, to include engagement with, and data gathering from product producers and providers.

Focus Area 5: Business Model and Strategy

The Central Bank notes the continued consolidation of the retail intermediaries sector and emphasises that intermediaries must demonstrate that their business models continue to secure customer interests during periods of change.

The main planned supervisory activities include:

• Review of consolidation in the market at a sectoral level to gauge the impact on consumers and identify any emerging trends or risks.

Contributed by James O'Brien, Caitlin Lenihan

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.