Under Section 17 of The Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002, as amended, a licensed insurance intermediary (or licensed insurance manager if applicable) “shall not arrange or attempt to arrange a contract of insurance between a client who is a member of the general public (in the Bailiwick or elsewhere) and any person other than a recognised insurer.”
The term recognised insurer is defined in Schedule 3 of The Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002, as amended as:
Any person who is licensed as an insurer under The Insurance Business (Bailiwick of Guernsey) Law, 2002 in respect of the description of insurance business concerned;
Any person who is entitled to carry on the description of insurance business concerned in or from within the Bailiwick without being licensed as an insurer under The Insurance Business (Bailiwick of Guernsey) Law, 2002 by virtue of section 5 of that Law;
Any other insurer for the time being included (specifically or by description) in a list of recognised insurers maintained and published by the Commission.
With regard to i) above, the insurer’s home jurisdiction is Guernsey and therefore these entities are licensed and supervised by the Commission itself. With regard to ii) above, these entities are not licensed insurers but are able to carry on certain types of insurance business as described in Section 5 of the Law. Point iii) above relates to overseas insurers who licensed insurance intermediaries may use to underwrite Bailiwick of Guernsey risks but who do not otherwise carry on business as an insurer in the Bailiwick and are therefore not licensed by the Commission.
List of recognised insurers
In carrying out its functions the Commission may have regard to the protection of the public interest, including the protection of the public against financial loss due to dishonesty, incompetence or malpractice by persons carrying on finance business. Restricting insurance intermediaries to using recognised insurers allows the Commission to make sure that the public interest is protected by ensuring insurance intermediaries only place business with appropriate insurers. As the insurers on the list are not licensed by the Commission, it is not responsible for their supervision and relies on the home supervisory authority. A list of recognised insurers is available here.
The general policy of the Commission is to include insurers on the list by description rather than individually. In considering which insurers should be included in the list, the Commission will consider the following factors (this list is not exhaustive):
Whether the home supervisory regime provides adequate protection to policyholders (including policyholders in the Bailiwick)
Whether the home jurisdiction has a policyholder protection scheme (which includes protection for policyholders in the Bailiwick)
Assessments of the home supervisory regime by international bodies, for example, the International Monetary Fund
For the avoidance of doubt, recognition is solely in respect of the classes of insurance business for which relevant authorisation is held with the home supervisory authority.
Any overseas insurers not included in the list by description and any overseas insurers wishing to write compulsory Bailiwick of Guernsey risks (see below), are required to submit a notification form to the Commission which includes details of the home supervisory authority, a description of the insurance business to be written in Guernsey, and details of the Guernsey licensed insurance intermediaries to be used. Upon receipt of this form, the Commission will carry out an assessment, including the factors listed above, to ensure that it is appropriate to include the insurer on the list.
Authorised motor insurers
Specific authorisation is required for any recognised insurer wishing to provide third party motor insurance to Bailiwick of Guernsey residents under The Road Traffic (Compulsory Third-Party Insurance) (Guernsey) Laws, 1936 to 1983 and The Road Traffic (Compulsory Third-Party Insurance) (Alderney) Law, 1950, as amended. Any such insurers must submit a Motor Insurance Application Form to the Commission. Applicants must be members of the Motor Insurers’ Bureau in the UK (“the MIB”) and are required to provide an address in the Bailiwick of Guernsey for the service of documents. All Bailiwick of Guernsey residents insuring motor vehicles for use in the Bailiwick are required to hold motor insurance underwritten by an Authorised Motor Insurer and to display evidence of this on their motor vehicles in the form of a Windscreen Insurance Disc (“WID”).
A list of current Authorised Motor Insurers is maintained here.
Other compulsory Bailiwick of Guernsey risks
Specific authorisation is also required for any recognised insurer wishing to provide insurance under any of the following laws:
The Surf Riding (Longboards) (Compulsory Third-Party Insurance) (Guernsey) Law, 1969
The Vessels and Speedboats (Compulsory Third-Party Insurance, Mooring Charges and Removal of Boats) (Guernsey) Law, 1972
The Steam Boilers (Insurance) Ordinance, 1952