Code of Practice for Insurance Intermediary Applicants and Licensees Conducting Business from within the Bailiwick of Guernsey

Summary

This Code of Practice, issued by the Guernsey Financial Services Commission under section 55 of The Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002, sets out the standards the Commission applies when licensing and supervising insurance intermediaries conducting business from within the Bailiwick. It supplements the Minimum Criteria for Licensing in Schedule 4 of that Law and covers fitness and propriety, conduct of business, organisational structure, physical presence, anti-money laundering compliance, and economic benefit to the Bailiwick.

• Fit and proper: Applicants, directors, employees and controlling shareholders must meet a high standard of honesty, competence and financial soundness.
• Conduct of business outside the Bailiwick: Licence approval for overseas business is conditional on statutory regulation abroad affording adequate policyholder protection, or on the licensee demonstrating equivalent standards and compliance with the Commission's codes.
• Four eyes requirement: At least two individuals (executive directors or persons with executive powers reporting to the Board) must genuinely direct and influence the business; single-majority-shareholder applications are generally not approved, and sole traders cannot be newly licensed.
• Sole trader arrangements: Existing sole trader licensees must have documented arrangements with another licensed entity to ensure adequate supervision and locum cover.
• Physical presence: Licensees must maintain a head office within the Bailiwick permanently staffed by Guernsey residents, with all client files and records held locally and available for Commission inspection, unless exempted for intermediaries marketing only to Bailiwick residents from elsewhere.
• Anti-money laundering compliance: Licensees must comply with money laundering avoidance legislation and KYC requirements; proposal documents must be sent to the Bailiwick office and subjected to four-eyes and money laundering checks before policies are issued.
• Clients relocating jurisdictions: Licensees servicing existing clients who move abroad, or approached by prospective clients from another jurisdiction, remain responsible for complying with the Conduct of Business provisions in Clause 2.

Breach of these provisions, particularly regarding cross-border conduct of business, may prompt Commission action following consultation with the relevant overseas regulator.

Key obligations

• Licensees conducting business outside the Bailiwick must ensure the jurisdiction provides adequate policyholder protection or that equivalent standards and compliance with Commission codes are demonstrated, with four-eyes checks carried out in both cases
• At least two individuals must genuinely direct and influence the strategy and day-to-day policies of the licensee (four-eyes principle)
• Sole trader licensees must maintain documented arrangements with another (non-sole-trader) licensed entity to ensure adequate supervision and locum cover
• Licensees must maintain a permanently staffed head office within the Bailiwick staffed by Guernsey residents, unless exempted by the Commission in writing
• All client files and records must be held locally within the Bailiwick and made available for Commission inspection
• Licensees must comply with money laundering avoidance legislation including know your customer provisions
• Proposal documents must be sent to the Bailiwick office and subjected to four-eyes and money laundering checks before policies are issued
• Licensees must ensure compliance with the Conduct of Business clause when servicing clients who relocate to another jurisdiction or are contacted from another jurisdiction

Applies to

insurance intermediary applicants, insurance intermediary licensees conducting business from within the Bailiwick of Guernsey

Related documents

• This document is made under Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 (Consolidated text)