Insurance laws Gibraltar (BOT)
Gibraltar, as a British Overseas Territory, maintains a robust and modern regulatory framework for its insurance sector. The primary legislation governing insurance activities is the Financial Services Act 2019, which consolidated and updated previous laws. This Act is supplemented by specific regulations tailored to various aspects of the insurance industry.
📜 Key Legislative Framework
Financial Services Act 2019 -Serves as the cornerstone of Gibraltar's financial services regulation, including insurance -Provides the legal basis for the establishment and operation of insurance companies within Gibraltar
Financial Services (Insurance Companies) Regulations 2020 -Details the requirements for licensing, operation, and supervision of insurance companies -Specifies the criteria for solvency, capital adequacy, and governance structures -Outlines the application process for obtaining an insurance license, including necessary documentation and fees -Requires insurers to maintain proper accounts and records in Gibraltar -Mandates the submission of annual accounts and compliance with technical reserve requirements
Financial Services (Insurance Management) Regulations 2020 -Regulates the activities of insurance managers operating within Gibraltar -Sets out the standards for the management and administration of insurance business -Ensures that insurance managers adhere to the principles of sound governance and financial stability
🧾 Licensing and Operational Requirements
Application Process Prospective insurers must submit a comprehensive application to the Financial Services Commission (FSC), including: Company details and proposed business plan. Information on directors, controllers, and manager. Draft policy wordings and reinsurance contract. Actuarial certificates and solvency calculation. Payment of relevant application and annual license fee.
Governance Insurers are required to have a board of directors with at least one member possessing insurance expertise. The majority of directors should be based in Gibraltar to ensure effective oversight.
Solvency and Reserves Insurers must maintain sufficient technical reserves to meet underwriting liabilities, including mathematical reserves for long-term business. These reserves must be represented by equivalent assets in the same currency as the liabilities they are intended to mee.
🧑💼 Insurance Distribution and Conduct of Business
**Insurance Distribution Directive (IDD)*: Gibraltar has transposed the EU's IDD into its national law, requiring insurance intermediaries:
Act honestly, fairly, and professionally in the best interests of their clients.
Provide clear and accurate information about insurance products.
Disclose details of remuneration and potential conflicts of interest.
Maintain appropriate professional indemnity insurance.
*Consumer Protection: The Gibraltar Financial Services Commission (GFSC) enforces regulations to ensure that insurers and intermediaries prioritize consumer interests, including:
Implementing Consumer Duty regulations to ensure fair treatment throughout the product lifecycle.
Monitoring transparency in pricing and communication of policy terms.
Conducting thematic reviews to assess compliance with conduct risk and fair value principes.
🌐 International Considerations
Solvency II Alignment: Gibraltar's insurance regulations align closely with the EU's Solvency II framework, ensuring high standards of capital adequacy and risk management.
Cross-Border Operation: Insurers licensed in Gibraltar may operate in other jurisdictions, subject to the regulatory requirements of those mares. Gibraltar's regulatory framework facilitates such cross-border activities while maintaining stringent oversight.
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