The Financial Services (Specified Insurers) (Temporary Exemption) Regulations 2020 were recently amended on 1st April 2022 to include access to the Gibraltar market by Swiss insurers ("Specified Insurers Regulations 2020"). Under Gibraltar law, no person may carry out a regulated activity in Gibraltar by way of business unless it is an authorised person under part 7 of the Financial Services Act 2019 or it is an exempt person ("General Prohibition Rule").
The Specified Insurers Regulations 2020 were previously only limited to EEA insurers due to their EU derived right to carry on a specified insurance activity in Gibraltar irrespective of whether the EU derived right is a right to establish a branch, to provide services or both. An EEA insurer merely has to notify the Gibraltar Financial Services ("GFSC") that it (a) proposes to carry on specified insurance activity in Gibraltar after 31st December 2020 ("IP Completion Date"); and (b) intends to see exempt status to do so. Once notification has been given, the specified EEA insurer may carry on the specified insurance activity in Gibraltar on a temporary basis on and after IP Completion Date without contravening the General Prohibition Rule. It also allows the specified insurer to seek an exempt status. These amendments would certainly be welcomed by all as it will allow competition in the Gibraltar market.
There are, however a few things to watch out for.
- "Specified insurance activity" is defined as a regulated activity of a kind which the GFSC considers has or would likely to have the effect in Gibraltar of enhancing competition in the provision of insurance and increasing choice for the consumers. Therefore, it would be necessary for the specified insurer to demonstrate that the consumers in Gibraltar require those products. One would think that if the products are of mandatory lines of insurance, they would certainly satisfy the test since there are more products on the market by different insurers which will then encourage fair competition and reasonable product pricing.
- The other catch to the said Specified Insurers Regulations 2020 is that it only applies to "specified insurers" meaning only insurance undertakings which are:
(a) established in an EEA state or Switzerland (its "home jurisdiction") and authorised by the supervisory authority to carry on regulated insurance activity in that jurisdiction and either:
(i) before IP Completion Date, was carrying on regulated insurance activity in Gibraltar or would have been entitled to do so by virtue of an EU derived right; or
(ii) on or after IP completion Date, would have been entitled to carry on regulated insurance insurance activity in Gibraltar by virtue of an EU derived right but for Gibraltar's withdrawal from the European Union; and
(b) carries on or proposes to carry on specified insurance activity in Gibraltar through an authorised insurance intermediary in Gibraltar.
Managing general agents ("MGAs") in Gibraltar will now have choices not only to seek capacity from EEA insurers but also Swiss insurers. The current motor market desires rated products and by allowing Swiss insurers to have access into the Gibraltar market, whether through wholesale market (through authorised insurance intermediaries) or retail, would certainly create a bigger pool of insurers, in particular rated insurers, for the market to choose from..
- Finally, the exempt status does not enable the specified insurer to carry on specified insurance activity or other regulated activity in the United Kingdom. Thus, the right to underwrite insurance in Gibraltar does not of itself offer passporting rights to Swiss insurers.