Recognised insurers are those insurers whose existence is recognised by the Commission to the extent of the activities for which the insurer holds appropriate authorisation in their home jurisdiction.  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 5 of The Insurance Business (Bailiwick of Guernsey) Law, 2002, as amended (“the Law”), as:

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 wish to carry on insurance business in the Bailiwick of Guernsey through licensed insurance intermediaries but who do not maintain a physical presence in the Bailiwick and are therefore not licensed by the Commission.

 

In practice, the Commission accepts insurers licensed in the UK or the Isle of Man as recognised insurers as it considers that these jurisdictions operate adequate policyholder protection schemes. With regard to the UK, section 5.4 of the FSA Handbook extends the UK Financial Services Compensation Scheme to Guernsey residents. With regard to the Isle of Man, the “Life Assurance (Compensation of Policyholders) Regulations 1991” ensures that any policyholder would receive compensation in the event of the failure of an Isle of Man life insurance company.   Therefore, notification forms from such licensed insurers are no longer required unless they wish to write compulsory Bailiwick of Guernsey risks (such as third party motor insurance) where notification and authorisation is required (see below).  For the avoidance of doubt, such recognition is solely in respect of the classes of insurance business for which relevant authorisation is held with the home supervisory authority.

 

All other overseas insurers, including any overseas insurers wishing to write compulsory Bailiwick of Guernsey risks, are required to submit a notification form to the Commission which includes details of the home supervisory authority, a description of the insurance business the insurer is authorised to write in their home jurisdiction, 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 acknowledge the insurer as a recognised insurer, subject to the due diligence assessment discussed below.  For the avoidance of doubt, such recognition is solely in respect of the classes of insurance business for which relevant authorisation is held with the home supervisory authority.

 

In both of these cases, the Commission relies on the home supervisory authority for supervision of the insurer.  However, the Commission is mindful of its statutory and general duties as a licensing and supervisory body when determining whether to recognise insurers from overseas jurisdictions. Whilst the recognition of insurers is, in essence, simply a notification exercise on the part of the insurer, the Commission is required to undertake a due diligence assessment of the insurer concerned to ensure that its statutory and general duties will not be compromised by any such recognition.  Information from internationally recognised bodies, such as the International Monetary Fund and the International Association of Insurance Supervisors, regarding the regulatory and supervisory framework in place in the insurer’s home jurisdiction, may be utilised in making such a determination.

 

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.

 

Specific authorisation is also required for any recognised insurer wishing to provide insurance under any of the following laws: