In 1995 the Irish legislature enacted the Consumer Credit Act 1995 and the Investment Intermediaries Act 1995.

Bear in mind that by this time the U.K. Financial Services Act 1986 had been in existence for nine years, and that the Irish legislature and, more particularly, the Competent Authority directing the legislature with respect to the specifics of Financial Services legislation (i.e. the Central Bank) would have had full knowledge of the specific provisions within this powerful U.K. Act!

As already related in Section 2.6.2, the Regulatory Regime prevailing in Ireland was such that the Financial Institutions’ / Life Assurance Companies’ lobby succeeded in ensuring:

(a)	––– that the disclosure provisions of the forerunner Consumer Credit Bill did not make it into the Consumer Credit Act 1995, and
(b)	–––  that Life Assurance and similar type investment business was not governed by the Investment Intermediaries Act 1995 and, as a consequence, by the Requirements of the Central Bank's 1996 Code of Conduct that commanded the full disclosure of all material information, including commission.

The Regulatory Regime was therefore such that the Financial Institutions’ / Life Assurance Companies’ lobby had ensured that full regulatory control was retained within their Life Assurance / Insurance Industry Self Regulatory Body.



But, notwithstanding the lobbying power of those within the Financial Services / Life Assurance Industry, there was a political limit to the extent to which the Irish legislature could continue with its overt acquiescence to their interests.


In November 2000, under power of the Investment Intermediaries Act 1995 and the Stock Exchange Act 1995, the Central Bank published its 'Handbook for Investment and Stockbroking Firms'. This Handbook included Code of Conduct (and Advertising) Requirements to be complied with by regulated firms (Financial Services Institutions) and further consolidated the Requirements of the previous 1996 Code of Conduct.

NOTE! Again, as with the forerunner 1996 Code of Conduct for Investment Business Firms, this Central Bank 'Handbook' was really only issued internally, i.e. to the respective Financial Services firms regulated by the Central Bank. Again, there was no effort made by the Central Bank to make the public at large aware of its contents, or even of its existence.

 

In December 2000, the Insurance Act 2000 was enacted by the Irish legislature to provide for the 'Authorisation and Supervision of Insurance Intermediaries by the Central Bank'. Within the provisions of the Insurance Act 2000, by an Amendment to Section 25 of the Investment Intermediaries Act 1995, the definition of an ‘investment product intermediary’ was altered to include an ‘investment business firm’ (or a certified solicitor) dealing in ‘insurance policies’.

As a result, there was major shift of power within the Regulatory Regime: Self Regulation was terminated, and the activities of the Life Assurance Companies, and of those dealing in their products, became subject to the provisions of the Investment Intermediaries Act 1995 and were brought under the independent regulatory authority of the Central Bank. (BUT, as we shall see below, and as will become more evident in the Sections that follow, THIS WAS IN THEORY ONLY!) 



Subsequently, under the provisions of the Central Bank and Financial Services Authority of Ireland Act 2003, the Irish Financial Services Regulatory Authority (IFSRA), as a newly formed constituent part of the Central Bank, became the Regulatory Authority for such activities.

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The Insurance Act 2000 came into effect on 1st April 2001 and, as a consequence, from 1st November 2001, the Life Assurance Companies were required to comply with all the Code of Conduct (and Advertising) Requirements as issued by the Central Bank under power of Sections 37 and 23 of the Investment Intermediaries Act 1995. 

BUT, while the optics were such that the Central Bank was now regulating the activities of the Life Assurance Companies, what transpired in reality was a whole other matter.

For, even though the activities of the Life Assurance Companies now came under the Irish Central Bank's regulatory control, and even though the Central Bank would by this time have been well aware of the situation in the United Kingdom, where the widespread abuse of customers / consumers by Life Assurance Companies had been exposed, the Central Bank continued to adopt a wholly passive role in respect of its regulatory functions.

The Central Bank stood back from its duties and, instead, allowed the Insurance / Life Assurance Industry's own 'Control and Containment' system of Self-Regulation to continue to prevail.

The contrived consequences of this regulatory inaction by the Central Bank will become evident through the following Sections.

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And, yet again, within the Insurance Act 2000, the Irish legislature continued to ensure that the interests of the Financial Services Institutions remained paramount. Yet again, the Irish legislature ensured that there was no statutory provision whereby the aggrieved customer / consumer could seek direct remedy through the Courts for a breach of any of the Code of Conduct (and Advertising) Requirements, as was the case in the U.K. (See Section 2.5.5.)


Again, bear in mind that at this stage the U.K. Financial Services Act 1986 had been in existence for fourteen years, and that the Irish legislature and the Central Bank would have had full knowledge of the specific provisions within this Act!


By their failure to give true statutory effect to such remedy for breach of Common Law duty, the Irish legislature, once again, kowtowed to the Financial Institutions’ / Life Assurance Companies’ interests.

It also ensured that investigation of individual customer's / consumer’s grievances would continue to be done behind closed doors and, as a result, that there would continue to be a lack of awareness of ‘causes of action’ among customers / consumers generally —— again, all very much to the benefit of the Financial Institutions and their Management Personnel.


The application of the new Regulatory Regime, therefore, while a step forward, was still very much weighted against the interests of the customer / consumer.

 

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BUT, it is in its failure to create express statutory offences and penalties for 'fraudulent misrepresentation' within the provisions of the Investment Intermediaries Act 1995, or within its subsequent Amendments within the Insurance Act 2000, or within the self-assertive Central Bank and Financial Services Authority of Ireland Acts of 2003 and 2004 (these will be discussed in the following Sections), that the acquiescence of the Irish legislature to the interests of the Financial Institutions / Life Assurance Companies and their Management Personnel is most outrageously manifest.



Consider the express fraudulent misrepresentation provisions of Section 47 of the U.K. Financial Services Act 1986 and of Section 397 of the U.K. Financial Services and Markets Act 2000 (see Section 2.5.1).


That the Irish legislature should have seen fit not to mirror these fraudulent misrepresentation provisions, in the light of its certain knowledge of the existence of such express provisions within U.K. legislation, reflects a conscious decision NOT TO specifically CONFRONT ‘WHITE COLLAR FRAUD’, where such fraud is perpetrated by Financial Institutions / Life Assurance Companies or their Management Personnel against clients / customers / consumers.


The Investment Intermediaries Act 1995 and the Insurance Act 2000, therefore, once again, belittled the Irish consumer by providing statutory legislation that was (and still is) without teeth.

 

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