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Gibraltar has established itself as a leading financial services centre and has developed a reputation for firm but fair regulation, and a well-developed mature infrastructure of professionals in a wide range of fields. Under the EU insurance directives, insurers and intermediaries based in Gibraltar can provide insurance in other Member States using a Gibraltar licence and without having to apply for a separate licence in the other territory. In 1997, Gibraltar acceded to the Single European Market for Insurance, its regulatory body (“the Gibraltar Financial Services Commission”) having been recognised as a competent regulatory authority within the EU. The Gibraltar Financial Services Commission maintains a firm regulatory stance, ensuring Gibraltar is regarded as one of the better regulated financial centres, and in keeping with the requirement of its statute to “match” UK regulatory standards and practices. Since then a number of insurance institutions of different types have made their home in Gibraltar, and enjoyed the benefits of being based here.
In July 2014 the Government of Gibraltar confirmed that it had received written confirmation from HM Treasury, United Kingdom Government, that Part VII transfers can take place between the United Kingdom and Gibraltar insurers.
Solvency II was implemented in Gibraltar with effect from 1 January 2016. The Solvency II is a Directive in European Union law that codifies and harmonises the EU insurance regulation. Primarily this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency. The Gibraltar Financial Services Commission fully supports these European goals and takes their obligations to implement Solvency II seriously. They expect firms to do likewise as it is important to the reputation of Gibraltar that we have a well-managed and well-capitalised market.
Gibraltar has strong ambitions to become the Insurance Linked Securities (ILS) jurisdiction of choice within the European Union. With the introduction of Solvency II from the beginning of 2016, this is likely to create greater opportunities for onshore ILS offerings within the European Union. In 2014, the Gibraltar Financial Services Commission finalised and published its guidelines regarding the process to be followed, and the requirements, for the establishment and licensing of an Insurance Linked Securities (ILS) vehicle as an Special Purpose Vehicles (SPV) in Gibraltar.
Gibraltar’s insurance sector continues to grow significantly; in particular insurance coverage for UK motorists. However, Brexit is likely to bring challenges to the insurance sector for EU facing businesses. The outcome of negotiations in relation to and from the exit process is uncertain. Notwithstanding this, Gibraltar’s insurance sector remains in a strong position given that 90% of premiums written are derived from UK written risks.
RSM has extensive experience in the insurance industry servicing the non-life and life insurance and reinsurance business encompassing captives too. Our local experts work closely on insurance matters through our International partners and can offer support on matters including compliance and regulatory reporting, International Financial Reporting Standards and comprehensive taxation compliance and advisory services.