Insurance

Insurance business in Guernsey

Guernsey is perhaps best known as one of the world’s leading captive centres; offering a domicile for self-insurance for firms.

These firms are mainly located in the UK but a significant portion of the Guernsey captive industry originates from around the globe.

Apart from captives, Guernsey is also recognised as being a centre for reinsurance and insurance linked securities; offering in particular collateralised catastrophe reinsurance. Guernsey also serves ex-patriates especially for life and health insurance. Finally, Guernsey houses several local general insurance businesses serving both the local and international communities.Guernsey pioneered the protected cell company and more recently has seen growth in the use of the incorporated cell company, not least for the transfer of longevity risk for pension funds.

The Commission regulates insurance managers, who facilitate insurance business, and insurance intermediaries, mostly covering local broker requirements.

At the last third party review by the IMF in 2010, Guernsey was observant or largely observant in all but one of the international core principles.

Guernsey plays an active role in the International Association of Insurance Supervisors (IAIS) and currently chairs the Group of International Insurance Centres Supervisors (GIICS).

Approach to supervision

The Insurance Division supervises its licensed insurers, insurance managers, and insurance intermediaries by conducting regular off-site monitoring supplemented by periodic on-site monitoring.

Off-site Monitoring

Off-site monitoring is performed either on a prospective basis (i.e. before the event occurs) or on a retrospective basis (i.e. reviewing past performance). 

Prospective supervision

LICENSED INSURERS

Licensed insurers are required to notify the Commission of, and in some cases obtain the Commission’s prior approval for, material changes to the circumstances of the licensed insurer.  Some of the more common changes requiring notification are listed below:

• Material change to the business plan - Under section 11(2) of the Law, any proposed material change to a licensed insurer’s business plan is subject to prior notification to the Commission.  The Commission therefore expects to receive an amended narrative business plan reflecting the proposed change, together with an amended spreadsheet business plan, for consideration prior to such a change being implemented. 

• Change of director, controller, partner, manager or general representative - Under section 11(6) of the Law, a licensed insurer must obtain the Commission’s prior written approval before effecting any change of any director, controller, partner, manager or general representative.  Any such proposed changes should be submitted in writing to the Commission. 

• Change of actuary - Under section 40 of the Law, a licensed insurer must notify the Commission in writing of any change of actuary and the reason for the change.  In addition, a licensed insurer must appoint a new actuary within 28 days of the resignation of the previous actuary unless otherwise agreed in writing by the Commission.

INSURANCE MANAGERS & INTERMEDIARIES

• Change of director, controller, partner or manager - Under section 27(5) of the Law, a licensed insurance manager or insurance intermediary must obtain the Commission’s prior written approval before effecting any change of any director, controller, partner or manager.  Any such proposed changes should be submitted in writing to the Commission. 

• Change of auditor - Under section 21 of the Law, a licensed insurance manager or insurance intermediary must notify the Commission in writing of any change of auditor and the reason for the change.  In addition, the licensee must appoint a new auditor within 28 days of the resignation of the previous auditor unless otherwise agreed in writing by the Commission.

On-site Monitoring