Approach to supervision
The Banking and 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 an 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 their circumstances. 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 which reflects the proposed change, together with an amended spreadsheet business plan, for consideration prior to such change being implemented.
- Change of director, controller, partner, manager or general representative - Under section 25 of the Law, a licensed insurer must obtain the Commission’s prior written approval before effecting any change of director, controller, partner, manager or general representative. Any such proposed changes should be submitted in writing to the Commission.
- Change of auditor - Under section 34 of the Law, a licensed insurer must notify the Commission in writing of any change of auditor and the reason for the change. In addition, a licensed insurer must appoint a new auditor within 28 days of the resignation of the previous auditor unless otherwise agreed in writing by 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.
Please note that the above list is not exhaustive and should only be used for information purposes. Whilst the Commission is happy to provide help and guidance on what may require notification or approval, the licensed insurer and its general representative are ultimately responsible for ensuring compliance with all relevant laws, regulations, rules, and codes.
INSURANCE MANAGERS AND INTERMEDIARIES
Licensed insurance managers and insurance intermediaries are required to notify the Commission of, and in some cases obtain the Commission’s prior approval for, material changes to their circumstances. Some of the more common changes requiring notification are listed below:
- Material change to the business plan - Under section 27(2) of the Law, any proposed material change to a licensed insurance manager’s or insurance intermediary’s business plan is subject to prior notification to the Commission. The Commission therefore expects to receive an amended narrative business plan which reflects the proposed change for consideration prior to such a change being implemented.
- Change of director, controller, or partner - Under section 37 of the Law, a licensed insurance manager or insurance intermediary must obtain the Commission’s prior written approval before appointing any director, controller, or partner. Any such proposed changes should be submitted in writing to the Commission.
- Change of authorised insurance representative - Under section 38 of the Law, a licensed insurance intermediary or insurance manager, where applicable, must notify the Commission of the change of any authorised insurance representative within 14 days of such a change being made.
- 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.
Please note that the above list is not exhaustive and should only be used for information purposes. Whilst the Commission is happy to provide help and guidance on what may require notification or approval, each individual licensed insurance manager or insurance intermediary is ultimately responsible for ensuring compliance with all relevant laws, regulations, rules, and codes.
Retrospective supervision
All licensed insurers, insurance managers, and insurance intermediaries are required to submit an annual return to the Commission containing information in respect of past performance. Please refer to the Returns section for further information upon the annual return requirements. Where serious issues have been identified, such as solvency breaches, the Commission may require the licensed insurer to provide additional information and/or take immediate action to rectify the position.
Licensed insurers writing long term business are required to appoint an independent, Guernsey-based trustee who must report full details of the assets held in trust to the Commission on a quarterly basis.
On-site Monitoring
The Banking and Insurance Division performs regular on-site visits to its licensees to enhance the Division’s understanding of the licensee’s business, and to review the risk management systems and internal controls in operation. These visits may be carried out on a full scale basis, covering all risks to which the licensee is exposed, or on a focussed basis, covering specific areas of concern such as corporate governance, market conduct, or anti money laundering procedures.
In addition, the Banking and Insurance Division holds both regular and ad hoc meetings with its licensees to keep abreast of any significant developments and to discuss any issues that may arise.
Appointment of a Skilled Person
The Commission may appoint a Skilled Person to investigate and report directly to the Commission in order to mitigate and manage prudential, conduct or financial crime risks identified within a licensed insurer, insurance manager or insurance intermediary. Further information about Skilled Persons is available in this Explanatory Note.