Insurance Business (General Provisions) (Jersey) Order 1996

Summary

This Order made under the Insurance Business (Jersey) Law 1996 sets out general provisions supplementing that Law, including exemptions from the definition of long term and general insurance business, conditions attached to Category B insurance permits, when auditors or reporting persons must report directly to the Jersey Financial Services Commission, and the duties of actuaries appointed by permit holders.

• Exemptions: Certain general business classes (14 to 18) and certain single-member long term business companies are exempted from Article 5 of the Law; vehicle breakdown and roadside assistance benefit-in-kind contracts meeting specified terms are also exempted.
• Auditor and reporting person duties: Auditors or persons reporting under Article 10 of the Law must report directly to the Commission in exceptional circumstances, such as loss of confidence in the integrity or competence of a permit holder's directors or senior management, or where the permit holder fails to inform the Commission itself of a reportable matter.
• Actuary duties: An actuary appointed under Article 25(1) of the Law must value the permit holder's long term liabilities annually (or more often if needed to monitor solvency) and endorse the valuation basis and solvency calculation in the annual financial statements, in accordance with Institute of Actuaries or Faculty of Actuaries rules.
• Category B permit conditions (Schedule): Category B permit holders must remain wholly owned by the applicant (unless the Commission agrees otherwise), obtain Commission consent before changing directors or writing new products/risks, use only Commission-approved auditors, restrict liquid asset investments to specified categories, and provide regular financial and business reporting to the Commission.

The Order also lapsed its original fee-prescribing provisions in 2008, since fee-setting power moved to the Commission itself; those provisions have been removed from the consolidated text.

Key obligations

• An actuary appointed by a permit holder must prepare a valuation of long term business liabilities every year, or more frequently if needed to monitor the solvency margin
• The actuary must endorse in writing the valuation basis and solvency calculation as part of the permit holder's annual financial statements
• Auditors or reporting persons must report certain matters directly to the Commission in exceptional circumstances without informing the permit holder in advance
• Category B permit holders must remain wholly owned by the original applicant unless the Commission agrees otherwise
• Category B permit holders must obtain the Commission's prior consent before changing directors or writing new risks or products
• Category B permit holders must use only Commission-approved auditors
• Category B permit holders must furnish information to the Commission at six monthly intervals as determined by the Commission
• Category B permit holders must furnish six monthly financial statements (balance sheet and profit and loss account) prepared under specified accounting standards
• Category B permit holders must furnish audited accounts to the Commission within three months of the end of the financial period
• Category B permit holders must restrict investment of liquid assets to bank deposits, government securities, certificates of deposit and approved Eurobonds unless otherwise agreed
• Category B permit holders' auditors must provide formal confirmation every six months that conditions on new products and investment restrictions have been complied with
• Category B permit holders must submit a five year rolling business plan with explanations of variances when submitting annual audited financial statements

Applies to

insurance permit holders under the Insurance Business (Jersey) Law 1996, Category B permit holders, auditors of permit holders, actuaries appointed by permit holders, insurers providing vehicle breakdown or accident benefit in kind contracts

Deadlines

• annually or more frequently: Actuary must prepare a valuation of long term business liabilities
• 6 monthly intervals: Category B permit holder must furnish business information and financial statements to the Commission, and auditors must confirm compliance with conditions 4 and 8
• within 3 months of the end of the financial period: Category B permit holder must furnish audited accounts to the Commission
• with the annual audited financial statements: Category B permit holder must provide a 5 year rolling business plan to the Commission

Related documents

• This document is made under Insurance Business (Jersey) Law 1996