Financial Services (General Insurance Mediation Business (Accounts, Audits, Reports and Solvency)) (Jersey) Order 2005

Summary

This Jersey Order sets out detailed accounting, audit, reporting and solvency requirements for persons registered to carry on general insurance mediation business under the Financial Services (Jersey) Law 1998. It covers approval of accounting periods, record keeping, appointment and reporting duties of auditors, the content of financial statements and declarations, and minimum solvency margins, backed by criminal offences for non compliance.

• Accounting periods: Registered persons must apply to the Commission for approval of their first accounting period (maximum 18 months) and each subsequent period (normally 12 months), and cannot change an approved period without Commission approval.
• Accounting records: Registered persons must keep accounting records showing all transactions, enabling preparation of financial statements and disclosure of financial position and compliance with financial resources requirements; records must be securely stored, backed up, and retained for at least 10 years.
• Auditor appointment: Registered persons must engage only a Commission approved auditor; if an auditor's appointment ends, the auditor must notify the Commission within 7 days of any reportable circumstances.
• Financial statements and reports: Registered persons must provide financial statements to their auditor after each accounting period, and submit financial statements to the Commission within 4 months of the period end (extendable to up to 8 months in special circumstances), accompanied by a declaration, an auditor's report, and details of relevant internal/external audit or consultant reports.
• Declarations: Each declaration must state compliance with the Law, applicable Orders/Codes of Practice, proper accounting records, and anti money laundering requirements, and must disclose any material failures and remedial measures.
• Consolidated statements: Group members may submit consolidated financial statements instead of individual ones where permitted accounting standards allow, with a single auditor's report covering all group declarations.
• Reporting concerns: Auditors, accountants and other reporting persons must communicate to the Commission any reasonable belief that grounds for revoking registration exist or that a client has suffered or risks material loss from regulatory or control breaches.
• Solvency margins: Registered persons must maintain and calculate a margin of solvency, notify the Commission if they fail to maintain it, and comply with any Commission approved financial scheme required to restore the margin.
• Exemptions: Registered persons may apply to the Commission for exemption from Articles 2 to 9, subject to conditions, and exemptions may be revoked after a 14 day show cause notice process; appropriately regulated persons from other jurisdictions may also qualify for exemption from the Order.

A transitional provision allowed registered persons who had not obtained audited financial statements before 17 February 2005 to be exempted from certain audit requirements on their first reporting occasion, with the 4 month filing deadline extendable to up to 8 months.

Key obligations

• Registered persons must apply to the Commission for approval of their first and subsequent accounting periods and obtain approval before changing an accounting period.
• Registered persons must keep secure, backed up accounting records enabling preparation of financial statements, retained for at least 10 years.
• Registered persons must not engage an auditor unless approved by the Commission.
• An auditor whose appointment is terminated must provide a statement to the Commission within 7 days of termination.
• Registered persons must provide financial statements and a declaration to their auditor as soon as practicable after each accounting period ends.
• Registered persons must submit financial statements to the Commission within 4 months after the end of the accounting period (or up to 8 months if the Commission permits due to special circumstances), accompanied by a declaration, auditor's report, and relevant internal/external audit or consultant report details.
• Financial statements must be prepared in accordance with International Accounting Standards or specified GAAP and show a true and fair view of the registered person's financial position and profit or loss.
• Declarations must disclose compliance status with the Law, applicable Orders/Codes of Practice, accounting record requirements, and anti money laundering laws, including details of any material failures and remedial steps.
• Registered persons must maintain a margin of solvency, calculate it as required, and notify the Commission if they fail to maintain it.
• A registered person required to prepare a financial scheme to restore its solvency margin must comply with the scheme's requirements once approved by the Commission.
• Auditors, accountants and other reporting persons must communicate to the Commission specified circumstances suggesting grounds for revocation of registration or risk of material client loss.

Applies to

registered persons carrying on general insurance mediation business, auditors of registered persons, accountants and consultants engaged by registered persons

Deadlines

• within 4 months after the end of the accounting period: Deadline for registered persons to provide financial statements, declaration and auditor's report to the Commission.
• up to 8 months after the end of the accounting period: Extended deadline the Commission may permit for filing financial statements in special circumstances, including for the transitional provision covering persons not previously audited.
• within 7 days of termination: Deadline for an auditor whose appointment is terminated to provide a statement to the Commission on reportable circumstances.
• at least 14 days before amending or revoking an exemption, with 14 days to show cause: Notice period the Commission must give before amending exemption conditions or revoking an exemption, and period given to the registered person to respond.
• at least 10 years from the date the records were made: Minimum retention period for accounting records and backup copies.
• before 17 February 2005: Cut off date defining eligibility for the transitional provision on financial statements not previously audited.

Related documents

• This document is made under Financial Services (Jersey) Law 1998