Regulation of Guernsey’s insurance industry is meeting current international standards, according to a report published by the International Association of Insurance Supervisors (IAIS).
The report states that Guernsey has “a high level of observance of current international standards”. It highlights the island’s continuing success in keeping pace with developments in Insurance Core Principles (ICPs), and the investment that has been made in the continuing enhancement of supervision. The Insurance Core Principles provide a globally-accepted framework of principles, standards and guidance for the regulation and supervision of the insurance sector.
The Guernsey Financial Services Commission (GFSC) is an active member of IAIS, which promotes cooperation among insurance supervisors worldwide. The Guernsey report is the first time it has provided a member with in-depth feedback on the implementation of ICPs.
Guernsey is the leading captive insurance market in Europe, and is also engaged in reinsurance, insurance-linked securities and longevity risk transfers, as well as some specialist insurance.
“This report is a welcome endorsement of the strength of our important insurance industry and of a regulator who is seen as approachable, pragmatic and flexible,” said Dominic Wheatley, Chief Executive of Guernsey Finance.
“Our insurance industry is diverse, expert and has a history of world-leading innovation. And confirmation earlier this year from the EU Council’s Code of Conduct Group and the European Council of Finance Ministers (ECOFIN) that the island satisfied its legal substance requirements was another important validation for our position as an international insurance centre. It was important for us to be white-listed, a position which some of our international competitors have so far failed to secure.
“Over more than 50 years we have developed into a jurisdiction of true substance, committed to meeting international standards. In meeting those standards, including the ICPs, we can provide the certainty, stability and competitiveness that our clients demand.”
The report highlights high supervisory standards in Guernsey and its drive to be competitive on cost. The GFSC keeps up to speed with regulatory and supervisory developments and its supervisory programmes are well-managed, well-organised and effective in dealing with policyholder risk.
GFSC Chairman Dr Cees Schrauwers said: “We are pleased to receive the report from IAIS. The assessment provides a high-quality update to the 2010 IMF assessment of our observance of international standards, and it gives international counterparties assurance they may place reasonable reliance on the Bailiwick’s regulatory standards and those of the firms operating under them.”
Jonathan Dixon, IAIS Secretary General, said: “The IAIS conducts assessments as a core function of its implementation programme. They help members identify the nature and extent of any areas for improvement or gaps in their supervisory and regulatory frameworks and promote understanding and observance of IAIS supervisory material.
“Furthermore, these assessments provide information on the level of current supervisory capacity and the extent of future supervisory development needs for individual authorities as well as regional and global groupings of supervisors.”
The Guernsey insurance industry numbers 36 insurance intermediaries and 20 insurance managers, largely engaged in managing captive insurers and speciality niche insurers, and in total more than 650 licensed international insurers.