Insurance Business Rules and Guidance, 2021 (Consolidated Version)

Summary

This is a consolidated set of Rules and accompanying Guidance issued by the Guernsey Financial Services Commission governing the conduct of insurance business in the Bailiwick of Guernsey. It replaces and consolidates several earlier regulations and rules covering licensing, annual returns, public disclosure, general representatives, special purpose insurers, and conduct of business, setting out a single framework of binding Rules plus non-binding Guidance Notes on how to demonstrate compliance.

• Licensing: Sets out the detailed information an applicant for an insurance licence must submit, including ownership and control details, a business plan with financial projections, reinsurance and fronting arrangement summaries, service provider and personal questionnaire information, and constitutional documents.
• Annual returns and audits: Requires licensed insurers to submit annual returns containing an updated business plan, reinsurance reliance declarations, auditor's management letter or confirmation, corporate governance adherence summary, and (for general retail insurers) detailed underwriting, persistency, claims, intermediary, outsourcing, reinsurance and complaints data per Schedule 3.
• Public disclosure: Imposes requirements on licensees to publicly disclose specified information (Schedule 1) and to make information available to persons with a valid interest, supported by a disclosure policy.
• General representatives: Sets out the duties of general representatives, including communication obligations to the Commission, and the Commission's power to impose or waive conditions.
• Special purpose insurers: Establishes requirements on controllers, collateral, and participation, and on applications, consents and requirements applicable to special purpose insurers.
• Conduct of business: Requires licensees to act with due skill, care and diligence, treat customers fairly, manage conflicts of interest, oversee intermediaries, ensure fair product development and promotion, give timely and clear pre and post-contractual information, provide advice appropriately, handle policy servicing, renewals, claims and complaints fairly and within defined standards, and maintain sound cash management.

The Rules revoke a number of earlier instruments (including the 1987 Accounts and Annual Return Regulations, 2008 and 2010 Annual Return and Licensing Regulations, the 2010 and 2018 Public Disclosure Rules, the 2018 Conduct of Business Rules, and the 2016 Special Purpose Insurer Rules) and consolidate them into this single framework, incorporating amendments made by the Insurance Business (Amendment) Rules, 2024.

Key obligations

• Licence applicants must submit a fully completed application, prescribed fee, ownership and control information, a detailed business plan with financial projections and reinsurance summaries, and information on directors, officers, auditors, actuaries and other service providers.
• Licensed insurers must submit annual returns including an up-to-date business plan, reinsurance reliance declarations, auditor's management letter (or confirmation none is required), a corporate governance adherence summary, and a general representative's signed declaration.
• General retail insurers must include in their annual returns detailed underwriting, persistency, claims, policyholder location, intermediary, outsourcing, reinsurance and complaints information as specified in Schedule 3.
• Licensees must publicly disclose specified information and disclose information to persons with a valid interest, supported by a written disclosure policy.
• General representatives must communicate specified matters to the Commission and fulfil their duties under Part 5.
• Licensees must treat customers fairly, manage conflicts of interest, ensure fair dealing with intermediaries, promote products in a clear, fair and not misleading manner, provide timely pre-contractual and contractual information, give appropriate advice, issue proper renewal notices, handle claims and complaints in a timely and fair manner, and maintain adequate cash management practices.
• Special purpose insurers must meet the Commission's requirements regarding controllers, collateral, participation, and related applications and consents.

Applies to

licensed insurers, general representatives, special purpose insurers, general retail insurers, protected cell companies, non-locally incorporated domestic insurers, insurance intermediaries