Insurance Managers Rules and Guidance, 2021 - Consolidated

Summary

This is the consolidated version of the Guernsey Financial Services Commission's Insurance Managers Rules and Guidance, 2021, made under the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2021. It sets out the licensing, capital, conduct of business, and reporting requirements that apply to licensed insurance managers in the Bailiwick, replacing several earlier regulations, and consolidates amendments made in 2022, 2023 and 2024.

• Licensing: Applicants for an insurance manager's licence must submit a completed application form, fee, detailed ownership and controller information, a business plan with financial projections, personnel details, third party service provider information, PI insurance details, client monies procedures and confirmation of share capital receipt.
• Annual returns: Licensed insurance managers must file an annual return comprising audited accounts, the auditor's management letter (or confirmation none will be issued), a list of insurers managed, PI cover renewal evidence, confirmation of compliance with the Law and Rules, and details of any breaches.
• Minimum Capital Requirement: Licensees not managing general retail insurers must hold at least £25,000 (or 125% of their PI deductible/excess if higher); those managing general retail insurers must hold at least £100,000 (or 125% of the PI deductible/excess if higher).
• Client assessments and gap analysis: Insurance managers must assess whether new and existing clients service retail customers, record reasons where they do not, and carry out a gap analysis per Schedule 2, updating policies where clients are identified as general retail insurers.
• Authorised insurance representatives (AIRs): Licensees must ensure AIRs comply with Commission codes, explain charges to clients, hold minimum qualifications, disclose representation and product scope to prospective clients, and must notify the Commission of AIR name, date of birth, qualifications and employment history within ten business days of authorisation or any change.
• Conduct of business: Licensees must comply with advertising standards, maintain fair dealing policies, keep detailed client records, and observe the Principles of Conduct of Finance Business in Schedule 1.

The Rules came into force on 1 November 2021, and the Commission may exclude or modify their application to individual licensees by written notice, or issue supplementary (non-binding) guidance.

Key obligations

• Applicants for an insurance manager's licence must submit the full documentation set out in Rule 2.1, including ownership, business plan, personnel and PI insurance details.
• Licensed insurance managers must file an annual return containing audited accounts, auditor's management letter, list of insurers managed, PI cover renewal evidence, and compliance confirmations.
• Licensees not managing general retail insurers must maintain a Minimum Capital Requirement of £25,000 or 125% of their PI deductible/excess, whichever is higher.
• Licensees managing general retail insurers must maintain a Minimum Capital Requirement of £100,000 or 125% of their PI deductible/excess, whichever is higher.
• Licensees must assess whether new and existing clients service retail customers, record reasons for negative assessments, and carry out a gap analysis under Schedule 2 within six months of the rule coming into force.
• Where a client is found to be offering general retail insurance not recognised by the insurer, the licensee must take steps to protect policyholders and notify the Commission.
• Licensees must notify the Commission of each AIR's name, date of birth, qualifications and employment history within ten business days of initial authorisation or any change.
• Licensees must ensure AIRs explain charges (including life cover charges, commissions, surrender penalties) to clients without delay.
• Licensees must ensure advertisements are not misleading, are clearly identifiable as advertisements, and meet the standards in Rule 7.3.
• Licensees must comply with the amendments to Rule 7.5 (Insurance) at their next insurance renewal following the coming into force of the 2022 Amendment Rules.

Applies to

licensed insurance managers, authorised insurance representatives (AIRs), insurance intermediaries

Deadlines

• 1st November 2021: Commencement date of the Insurance Managers Rules, 2021.
• within six months of this rule coming into force: Deadline for licensed insurance managers to complete client assessments and gap analysis for existing clients under Rule 7.1A.
• within ten business days of initial authorisation and of any changes: Deadline for licensees to notify the Commission of AIR details (name, date of birth, qualifications, employment history).
• at their next insurance renewal following the date on which the Insurance Managers (Amendment) Rules, 2022, come into force: Deadline for licensees to comply with the amendments made to Rule 7.5 (Insurance) by the 2022 Amendment Rules.