The Deputy Governor of the Central Bank has said there needs to be progress on the introduction of judge-made guidelines on insurance awards, if the cost of insurance here is to fall.

Ed Sibley said the Judicial Council Bill could prove very important together with other steps being done through the Cost of Insurance Working Group.

Referencing comments by the Chief Justice, Mr Justice Frank Clarke, about the draft legislation, he said an overall set of judge made guidelines would contribute to the consistency and proper calibration of awards.

Addressing the Insurance Ireland annual lunch he said there are a number of underlying factors why insurance charges here are high, issues that are the focus of the working group.

He said the actions would hopefully deliver an improved supply of insurance and reduce premium costs.

However, the Deputy Governor added that progress all presupposes that where there are benefits they are passed on to the consumer.

He also warned the industry about the risks of internationally provided insurance, adding that there is a requirement for more convergence at European level in terms of supervisory practices, insurance protection schemes and the resolution of failing firms.

Mr Sibley also reminded firms, like brokers and agents, that are responsible for acting as intermediaries between foreign firms and domestic providers, that they also have a responsibility to ensure the firms they are dealing with are sound.

His comments follow a number of incidents in recent years where the collapse of foreign insurers, like Maltese based Setanta for example, who were operating in the Irish market has left consumers here without cover and in many cases out of pocket.

In response, Brokers Ireland said it was important that regulators here and across Europe do not attempt to minimise or outsource their own regulation responsibilities.

"Companies such as Setanta Insurance and Qudos Insurance were legally operating in Ireland under EU law," said Cathie Shannon, Director of General Insurance at Brokers Ireland.

"That law is overseen by Regulators whose job it is to ensure that it is sufficiently robust to protect consumers."

"Broker firms do their utmost to scrutinise all publicly available financial information to assess the financial health of such firms but the reality is, the best available data sometimes will not reveal the true financial state of a company."

Mr Sibley also said that the Central Bank had seen excessive levels of outsourcing in the insurance industry, which he said has eroded or potentially will erode the substance of the entities using it.

Boards and senior management are expected to make sure they can run their business as they outsource, he added.

The risks around IT also continue to grow, he told the audience, and the Central Bank see that the fundamental managment of IT is not where it needs to be.

If companies are building digital strategies that require that IT capability to be there 24/7 and 365 days a year, it is going to be built on sand if they haven't invested in the technology, processes and people, he claimed.

He also cautioned that the bank sees some firms that are overly reliant on reinsurance and have significant levels of reinsurance compared to other group partners elsewhere in the world.

He said he expects to see boards or firms that are running a high level of reinsurance thinking about the counter-party risk and large exposures, and how they might collateralise those.

Mr Sibley also described the record of diversity in the insurance industry as "pretty woeful" and added that there is a need for the actions and outcomes to match the words.

The record of senior appointments shows that the insurance industry has gone backwards in 2018 from 2017 when it comes to diversity, he claimed.

The industry "is not making the progress that the fine words suggest" should be happening, he added.

As a result, there needs to be credible action that is effective, he said, not because it is the right thing to do but because it is about managing risk, getting better decision-making, and avoiding group think.