The Central Bank of Ireland has slapped a €3.5m fine on AXA Life Europe which sold insurance out of Dublin into the German market.

The fine relates to failures in corporate governance and risk management and handling of conflicts of interest.

ALE, authorised in Ireland to carry out life insurance business, set up a German branch in 2006 and started selling an insurance product known as TwinStar.

Between 2006 and 2012, ALE sold c.350,000 TwinStar policies, of which approximately 203,000 remain in place.

In 2012, ALE stopped underwriting new TwinStar policies, which were only sold in Germany, and closed its German branch in 2014.

In Association with

The Central Bank’s investigation found that ALE’s risk management systems failed because ALE did not put in place an effective process to identify, manage, monitor and report the risks arising from c.30,000 TwinStar policies.

The CBI said the appropriate fine of €5.2m was reduced by a third due to ALE’s co-operation with the probe.

CBI director of enforcement Seána Cunningham commented: “The sound supervision of cross-border activities, be it under free provision of services or the right of establishment, is an important part of the Central Bank’s mandate.

“This case demonstrates the effectiveness of close collaboration between the Central Bank and other financial regulators across the EU, in enhancing financial stability and the protection of consumers.”