Insurance Intermediaries Rules and Guidance, 2021 - Consolidated

Summary

This is the consolidated text of the Insurance Intermediaries Rules and Guidance, 2021, issued by the Guernsey Financial Services Commission under the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002. It replaces several earlier regulations (on licensing, client monies, annual returns, approved assets and conduct of business) with a single consolidated framework covering licensing, ongoing reporting, client money handling, capital and asset requirements, and conduct of business standards for insurance intermediaries.

• Licensing: Sets out detailed information required in an application for an insurance intermediary licence, including ownership structure, business plan, personnel details, PI cover, and client monies procedures.
• Exempt persons: Defines categories of persons (e.g. sellers of extended warranty, travel, or credit protection insurance bundled with goods/services, and insurance managers advising only large clients) who are exempt from registration.
• Annual returns: Requires licensed intermediaries to submit an annual return containing auditor's management letter, representative lists, PI cover renewal evidence, business plan updates, premium/turnover breakdowns by geography, and compliance confirmations.
• Client monies: Requires segregated client bank accounts, same-day (next business day) transfer of client money into those accounts, client notification if money is not banked within three business days, and restrictions on what non-client funds may be held in a client account.
• Capital and assets: Imposes a minimum capital requirement and rules on approved versus unapproved assets for licensees.
• Conduct of business: Covers corporate governance, compliance arrangements, accounting records, record keeping, client categorisation, complaints handling, insurance (PI cover), conflicts of interest, and notification obligations to the Commission.
• Principles of Conduct: Schedule 1 sets out ten Principles of Conduct of Finance Business (integrity, skill/care/diligence, conflicts of interest, customer information, customer assets, market practice, financial resources, internal organisation, and relations with the Commission) that licensees must observe.

The Rules came into force on 1 November 2021 and consolidate amendments made in 2022 and 2024, including a transitional provision requiring compliance with amended rule 7.8 (insurance/PI cover) from a licensee's next insurance renewal after the 2022 amendment came into force.

Key obligations

• Insurance intermediary licence applicants must submit detailed ownership, business plan, personnel, and financial information as specified in section 2.1.
• Licensed insurance intermediaries must submit an annual return containing the items listed in section 3.1, including auditor's management letter, representative lists, PI cover renewal, business plan, premium/turnover breakdown, and compliance confirmations.
• Intermediaries holding client money must open and maintain a segregated client bank account distinct from their own accounts.
• Client money must be paid into the client bank account no later than the next business day after receipt; if delayed, the reason must be recorded and, if not banked within three business days, the client must be informed.
• Intermediaries must not hold non-client money in a client account except for specified permitted amounts (e.g. minimum sum to open/keep account open, interest, commission due).
• Intermediaries must maintain adequate professional indemnity insurance cover and disclose its amount, limitations, and exclusions.
• Licensees must maintain a minimum capital requirement and hold only approved assets as defined in the Rules.
• Licensees must comply with corporate governance, compliance arrangements, record keeping, client categorisation, complaints handling, and conflicts of interest requirements set out in Part 7.
• Licensees must notify the Commission of specified matters under section 7.10 and section 4.8 (client monies notifications).
• Licensees must comply with amendments to rule 7.8 made by the 2022 Amendment Rules at their next insurance renewal following that amendment's commencement.

Applies to

insurance intermediaries, licensed insurance managers acting as insurance intermediaries, insurance representatives

Deadlines

• 1 November 2021: Commencement date of the Insurance Intermediaries Rules, 2021.
• next business day after receipt: Client money must be paid into the client bank account no later than the next business day after receipt.
• within three business days of receipt: If client money is not paid into the client account within three business days of receipt, the client must be informed.
• at their next insurance renewal following the 2022 Amendment Rules coming into force: Transitional provision requiring licensees to comply with amended rule 7.8 (PI cover) by their next insurance renewal after the 2022 amendment took effect.

Related documents

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