Licensed Insurance Managers & Intermediaries
Section 1(3) of The Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002, as amended (“the Law”) defines an insurance manager as “a person who exercises, in relation to any insurer of which he is not an employee, managerial functions (including administration and underwriting) or such other functions as may be prescribed by the Commission by regulation.” Any person wishing to act as an insurance manager in or from within the Bailiwick of Guernsey must be licensed under section 4 of the Law.
Licensed insurance managers are responsible for managing the day-to-day operations of the licensed insurers under their management. This may include the provision of underwriting, accounting, claims management and actuarial services, as well as providing assistance with other key areas such as compliance and corporate governance. One of the most important functions performed by licensed insurance managers is to act as general representative to the licensed insurers under their management. The duties of the general representative are as detailed in The Insurance Business (Duties of General Representatives) Regulations, 2008.
There are a number of licensed insurance managers operating within the Bailiwick of Guernsey which between them manage the day-to-day operations of the majority of the international insurers licensed in Guernsey.
Section 2(5) of the Law defines an insurance intermediary as “a person other than an insurance representative who by way of business: a) advises clients on their insurance requirements; and/or b) arranges contracts of insurance between insurers and clients.” This includes advising clients on the merits of buying, selling, lapsing, switching, cancelling, altering or converting a policy of insurance. Any person wishing to carry on business as an insurance intermediary or professing to carry on business as an insurance intermediary (as defined in section 2(3) of the Law) in or from within the Bailiwick of Guernsey must be licensed under section 4 of the Law.
In accordance with section 15 of the Law, every licensed insurance intermediary, as well as any licensed insurer acting as an insurance intermediary or licensed insurance manager who deals with the general public, is required to authorise one or more insurance representatives to act on its behalf in order to advise clients on their insurance requirements and arrange contracts of insurance. The licensed insurance intermediary (or other such person) is required to monitor and supervise its authorised insurance representatives to a high degree as it retains full responsibility for the actions and conduct of these individuals. The licensed insurance intermediary (or other such person) is also required to ensure that its authorised insurance representatives are, and remain, fit and proper as defined in Schedule 4 of the Law at all times.
Licensed insurance intermediaries are subject to minimum qualification requirements as prescribed by the Commission from time-to-time. Currently, authorised insurance representatives advising on long-term insurance products or services must hold the Chartered Insurance Institute Certificate in Financial Planning (or its equivalent) and a Bailiwick of Guernsey specific qualification, the Guernsey Insurance Certificate (“the GIC”). There are a number of licensed insurance intermediaries operating within the Bailiwick of Guernsey.
Warning Notice to Members of the General Public
Under section 17 of the Law, 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.” However, the Law does not seek to restrict individuals from obtaining insurance by whatever means they feel appropriate. Therefore, consumers resident in the Bailiwick of Guernsey may be placing themselves at risk if they arrange insurance directly, for example through the internet, with insurers or via insurance intermediaries that are not licensed by the Commission to carry on insurance business in Guernsey. Additional care should therefore be taken when arranging insurance directly to ensure that the policy meets all specified requirements and that it is enforceable in Guernsey should any claims arise.
It should be noted that 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 under the relevant road traffic laws and to display evidence of this on their motor vehicles in the form of a Windscreen Insurance Disc (“WID”).