insurance

Who is caught

Insurance regulation in the Bailiwick of Guernsey is administered by the Guernsey Financial Services Commission and rests on two principal statutes: the Insurance Business (Bailiwick of Guernsey) Law, 2002 for insurers, and the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 for managers and intermediaries. Both operate a licensing regime, and a range of subordinate Rules, Codes and guidance sit beneath them.

Entities caught

• Insurers: Anyone carrying on, or holding out as carrying on, long term or general insurance business in or from the Bailiwick must be licensed under the Insurance Business Law. The Solvency Rules classify licensed insurers into six categories, from commercial life and general insurers and reinsurers to captives and special purpose entities.
• Insurance managers and intermediaries: No person may act as an insurance manager, or carry on or profess to carry on business as an insurance intermediary, in or from the Bailiwick without a licence (intermediaries may alternatively be a licensed insurer).
• Representatives and advisers: Authorised insurance representatives and financial advisers advising retail clients on long term insurance products are subject to conduct Codes applied through their licensees.
• Branch operations: Insurers operating in the Bailiwick as branches rather than locally incorporated companies, including branches writing long term business for non-Bailiwick residents and UK authorised insurers serving only Bailiwick residents, are covered by a Code of Practice.
• Financial guarantee insurers: A bespoke regime under the 1996 Financial Guarantee Insurance Law applies only to Guernsey companies specifically designated as financial guarantee insurers by Ordinance.
• Related persons: Auditors, actuaries, general representatives, holders of approved and vetted supervised roles, and persons acquiring significant shareholdings or voting power in a licensee are also brought within scope.

Insurance licensees are additionally caught by cross-sectoral instruments: the Commission's enforcement, information-gathering and site-visit powers, the Cyber Security Rules for all licensees, the Financial Crime Returns Rules, the anti-money laundering duties under the Criminal Justice (Proceeds of Crime) Law, and the Finance Sector Code of Corporate Governance (insurers being subject to Appendix 3, with managers and intermediaries subject to the full Code).

Sources: Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Insurance Business (Bailiwick of Guernsey) Law, 2002 · Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 (Consolidated text) · Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 · Financial Services Commission (Site Visits) (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated Text) · Insurance Business (Financial Guarantee Insurance: Special Provisions) (Guernsey) Law, 1996 (Consolidated text) · Cyber Security Rules and Guidance, 2021 · Financial Crime Returns Rules, 2025 · Insurance Business (Solvency) Rules and Guidance, 2021 (Consolidated Version) · Code of Conduct for Authorised Insurance Representatives · Code of Conduct for Financial Advisers (November 2021) · Code of Practice for Branch Operations · Finance Sector Code of Corporate Governance (Amended February 2026) · Financial Crime Returns Rules, 2026

Key duties

The core continuing obligations attach to holding a licence and to periodic financial and solvency reporting. Deadlines cluster around the annual return and, for financial crime returns, fixed annual and quarterly filing dates.

Licensing and capital

• Licence: Insurers, insurance managers and insurance intermediaries must hold a Commission licence before carrying on the relevant business, and must comply with conditions of licence.
• Capital adequacy: Under the Solvency Rules, a licensed insurer must at all times hold regulatory capital resources at or above both its Minimum Capital Requirement and its Prescribed Capital Requirement, and (if a company) maintain paid up share capital of not less than the Capital Floor and shareholders' funds of at least 75% of the Capital Floor. The PCR must be calculated and reported at least annually and recalculated without delay on significant risk-profile change.
• Manager and intermediary capital: Insurance managers not managing general retail insurers must hold at least 25,000 pounds (or 125% of their PI deductible if higher), rising to at least 100,000 pounds for those managing general retail insurers. Intermediaries face a minimum capital requirement and approved-asset rules, plus segregated client money accounts.

Annual returns and audit

• Annual return and accounts: Licensed insurers must appoint an auditor, prepare and have audited annual accounts, and file annual returns and accounts with the Commission; the general representative is responsible for submitting the insurer annual return (form 133). Insurance managers and intermediaries must likewise file annual returns with audited accounts, the auditor's management letter and evidence of indemnity cover.
• Own Risk and Solvency Assessment: Insurers within scope must carry out an ORSA (or a narrower Own Solvency Capital Assessment where qualifying) and provide it to the Commission at least annually with the annual return, on new licence applications, and on material business-plan change affecting solvency.
• Actuarial requirements: Insurers writing long term business must appoint an actuary (unless the Commission agrees otherwise), arrange periodic actuarial investigation of financial condition at each accounting period end, and submit actuarial valuation reports and declarations with the annual return. If an actuary's appointment ends, a replacement must be appointed within 28 days, and a departing actuary must inform the Commission within 7 days of any relevant circumstances.
• Financial crime returns: Under the Financial Crime Returns Rules, licensees and registrants must file an annual Financial Crime Risk Return (period 1 July to 30 June, due 31 October), with banking licensees and certain others filing a quarterly Financial Flows Return. Insurance managers report on all business they conduct; intermediaries and insurers with mixed business report only on long term business.

Governance, conduct and notifications

• General representative: Licensed insurers must maintain a general representative in the Bailiwick.
• Long term business protections: Insurers with long term business must separate assets and liabilities attributable to that business, observe transfer restrictions, and obtain Royal Court sanction (supported by an independent actuary's report) for transfers of long term business.
• Conduct of business: Licensees must observe Principles of Conduct and Conduct of Business Rules, treat customers fairly, manage conflicts, oversee intermediaries and representatives, and meet public disclosure requirements. Intermediaries must place business only with recognised insurers and act through authorised representatives.
• Notifications: Insurers and managers must notify the Commission of, and where required obtain non-objection for, holders of approved and vetted supervised roles and changes to them, and of acquisitions or reductions of significant shareholdings or voting power. Persons subject to a Commission direction must notify changes of fact or circumstance, generally within 14 days.
• Corporate governance: Licensees must self-assess against the Finance Sector Code of Corporate Governance and be prepared to provide the Commission an assurance statement; insurer boards carry out annual reviews of governance, internal controls and environmental sustainability risks under Appendix 3.
• Cyber security: All licensees must identify assets and risks, maintain protective, detective, response and recovery measures under board oversight, and notify the Commission as soon as reasonably practicable of significant cyber security events.
• Fit and proper and AML: Licensees must assess supervised-role holders against the Fit and Proper standard at appointment and on an ongoing basis, and comply with the customer due diligence and other AML/CFT duties under the Proceeds of Crime Law.
• Open dealing: Under the Enforcement Powers Law, licensees must deal with the Commission in an open and co-operative manner, keep it promptly informed of matters that ought reasonably to be disclosed, and comply with information requests and electronic filing requirements.

Sources: Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Insurance Business (Bailiwick of Guernsey) Law, 2002 · Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 (Consolidated text) · Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 · Cyber Security Rules and Guidance, 2021 · Financial Crime Returns Rules, 2025 · Insurance Business (Solvency) Rules and Guidance, 2021 (Consolidated Version) · Insurance Business Rules and Guidance, 2021 (Consolidated Version) · Insurance Intermediaries Rules and Guidance, 2021 - Consolidated · Insurance Managers Rules and Guidance, 2021 - Consolidated · Finance Sector Code of Corporate Governance (Amended February 2026) · Fit and Proper Persons - Meeting the Criteria (February 2024) · Guidance Note for International Life and Pensions Insurers (November 2021) · Guidance Note for Licensed Insurers on the Completion and Submission of Annual Returns (November 2021) · Guidance Note on Actuarial Requirements and Standards · Guidance Note on Actuarial Valuations · Guidance Note on Licensed Insurers' Own Solvency Assessment · Financial Crime Returns Rules, 2026

Exemptions and carve-outs

The instruments provide a number of carve-outs, mostly narrowing the reach of specific reporting and solvency requirements rather than the licensing requirement itself.

• Insurance licensing: The requirement to hold an insurance licence is subject to limited exemptions provided in the Insurance Business Law, though the summaries do not enumerate them in detail.
• Intermediary exempt persons: The Insurance Intermediaries Rules define categories exempt from registration, including sellers of extended warranty, travel or credit protection insurance bundled with goods or services, and insurance managers advising only large clients.
• Financial crime returns: The Financial Crime Returns Rules do not apply to personal fiduciary licence holders, general-insurance-only licensees and intermediaries, certain lending/credit ancillary or premium-financing-only licensees, and certain Proceeds of Crime Law schedule businesses. The Commission may also exclude or modify application by written notice.
• ORSA: Category 6 licensees, dormant insurers with no outstanding liabilities, insurers whose board considers the PCR sufficient (with documented rationale), and any insurer so notified are fully exempt from ORSA; several categories below stated MCR thresholds and PCCs need perform only the narrower OSCA.
• Category 6 insurers: Special purpose insurers and qualifying non-special purpose insurers classified as Category 6 fall outside the risk-based solvency requirement, provided they remain Fully Funded and meet the Commission's criteria.
• Internal models: No Commission approval of an internal model is needed where a licensee uses the Guernsey Standard Formula or a formula on the Commission's Recognised Standard Formulas list.
• Branch prudential supervision: A branch operation whose home jurisdiction has broadly equivalent prudential rules is exempt from the prudential supervision aspects of the Law, though the Commission still requires information and liaises with the home regulator.
• Corporate governance code: Guernsey branches of foreign-domiciled companies, partnerships, and underlying SPVs or investment holding companies of funds are excluded, and companies reporting against the UK Corporate Governance Code or the AIC Code are deemed to comply.
• Incorporated cell companies: Licensees under the Insurance Managers and Insurance Intermediaries Law cannot use the expanded prescription to become or convert into an incorporated cell company.
• General derogations: The Cyber Security Rules, Insurance Managers Rules, and other Rules and Codes permit the Commission to exclude or modify their application to a licensee by written notice.

Sources: Insurance Business (Bailiwick of Guernsey) Law, 2002 · Companies (Incorporated Cell Companies) (Prescribed Classes) Regulations, 2021 · Cyber Security Rules and Guidance, 2021 · Financial Crime Returns Rules, 2025 · Insurance Intermediaries Rules and Guidance, 2021 - Consolidated · Insurance Managers Rules and Guidance, 2021 - Consolidated · Code of Conduct for Authorised Insurance Representatives · Code of Practice for Branch Operations · Finance Sector Code of Corporate Governance (Amended February 2026) · Guidance Note for Licensed Insurers on Category 6 – Non-Special Purpose Insurers · Guidance Note on Internal Models · Guidance Note on Licensed Insurers' Own Solvency Assessment · Financial Crime Returns Rules, 2026

Enforcement and penalties

Enforcement powers are drawn mainly from the Financial Services Business (Enforcement Powers) Law, 2020, supplemented by offence provisions in the insurance statutes, the site-visit regime, and the administrative penalty regulations. The instruments give the Commission a graduated toolkit rather than a single penalty schedule.

Commission enforcement powers

• Supervisory and disciplinary action: Under the Enforcement Powers Law the Commission may gather information, appoint inspectors, impose or vary licence conditions, suspend or revoke licences, object to holders of supervised roles, make prohibition orders against individuals and disqualification orders against auditors and actuaries, and impose discretionary and administrative financial penalties, private reprimands, enforceable undertakings and public statements.
• Directions and intervention: The Insurance Business Law lets the Commission issue directions, make rules and codes, require information, appoint skilled persons, and take enforcement action including licence revocation and prosecution. The Enforcement Powers Law also provides administration and intervention regimes for failing insurers.
• Supervisory ladder: For licensed insurers the Commission escalates intervention as capital falls relative to the PCR and MCR, requiring recovery plans, licensee-funded external reviews, business restrictions, removal or replacement of directors or controllers, and, below the MCR, immediate solvency-restoring action and potential winding up or administration.

Criminal and administrative penalties

• Insurance offences: Breach of key restrictions under the Insurance Business Law (such as carrying on unlicensed insurance business, contravening an Ordinance restriction, or failing to notify required changes) is a criminal offence, with liability capable of extending to directors and unincorporated bodies. Contravention of the Insurance Managers and Insurance Intermediaries Law likewise carries criminal penalties.
• Site visit offences: Obstructing or failing to comply with a site-visit request or requirement, making false or misleading statements, or falsifying, concealing or destroying relevant documents is an offence punishable on summary conviction by up to 6 months' imprisonment and/or a level 5 fine, or on indictment by up to 2 years' imprisonment and/or a fine.
• Late annual returns: Late annual insurance returns are automatically subject to an administrative financial penalty under the applicable Administrative Financial Penalties Regulations, and persistent lateness may trigger further supervisory or enforcement action. Late annual fee payment may similarly incur a penalty.
• Financial guarantee insurers: The 1996 Financial Guarantee Insurance Law contains offences for false statements and addresses the relationship between criminal and civil liability for designated financial guarantee insurers.

The Enforcement Powers Law also establishes a market abuse regime with related offences and Royal Court powers to impose financial penalties, and criminal offences for providing false information and tipping off. The summaries do not set out specific monetary amounts for most administrative and disciplinary penalties.

Sources: Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Insurance Business (Bailiwick of Guernsey) Law, 2002 · Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 (Consolidated text) · Financial Services Commission (Site Visits) (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated Text) · Insurance Business (Financial Guarantee Insurance: Special Provisions) (Guernsey) Law, 1996 (Consolidated text) · FAQ on Annual Fees · Guidance Note for Licensed Insurers on the Completion and Submission of Annual Returns (November 2021) · Guidance Note on Supervisory Ladder of Intervention