Apply for a licence

Insurance Companies

FAQs

The purpose of this page is to make sure that the application process is fully understood.

This section sets out:

  • What are Insurance Companies?
  • Our expectations of new insurance companies
  • What would this Licence allow you to do?
  • Capital Requirements
  • What do you need to submit?
  • Cells

Insurance Companies

Insurance companies are corporate entities that accept the transfer of a risk of loss from an entity, either a private individual or a business, in exchange for a payment (the premium).

Insurance companies may choose to specialise in specific classes and types of customers or pursue a broader strategy. Insurers may also decide to offer their products in other EU jurisdictions, either on a Freedom of Services or a Freedom of Establishment basis, utilising their Gibraltar licence.

Expectations of New Insurance Companies

In order to provide clarity to applicants, we have set out our expectations of new insurance companies and high level areas of focus when considering applications for new insurance companies and material changes to business plans.  

The GFSC’s Authorisations Policy Paper can be found here

Examples of the types of analysis we conduct  

A new motor insurer is applying to be authorised with £6 million of solvency capital.   A simple stress test might be that there is a claim that results in a large PPO within the first 24 months of operation.  Depending on the reinsurance structure and quality, could it cope with a large PPO award?  What is the impact on capital?  

A new insurer is planning to write in a niche market, and is projecting a loss ratio lower than for the market as a whole.  What is the justification for the loss ratio in the business plan?  What data sources have been used?  What controls are there for monitoring the loss ratio once live?  

A new insurer proposes writing business in a country with an unusual legal system.  What experience does the Board / executive have of the market in that country?  How will they monitor business performance?  

A new insurer plans to source business via an MGA.  How will the MGA be monitored against the contract with the insurer?  How will the insurer monitor customer outcomes for administration and claims handling?  What will the data flows be from the MGA to the insurer?  

What would this Licence allow you to do?

Authorisation must be sought for each class of business that the Insurance Company intends to transact. The classes are as follows:

General Insurance Business

Description Class
Accident 1
Sickness 2
Land vehicles 3
Railway rolling stock 4
Aircraft 5
Ships 6
Goods in transit 7
Fire and natural forces 8
Damage to property 9
Motor vehicle liability 10
Aircraft liability 11
Liability for ships 12
General liability 13
Credit 14
Suretyship 15
Miscellaneous financial loss 16
Legal expenses 17
Assistance 18

Long-Term Insurance Business

Description Class
Life and Annuity I
Marriage and birth II
Linked long term III
Permanent health IV
Tontines V
Capital redemption VI
Pension fund managementt VII
Collective insurance VIII
Social insurance IX

Further information on these Classes can be found under Schedules 1 and 2 of the Financial Services (Insurance Companies) Act 1987 (“the Act”).

An Insurance Company licence, unless otherwise expressly restricted, permits the transaction of reinsurance. Reinsurance is the acceptance of insurance risks from another Insurer but only in classes for which the Insurance Company is already authorised.

Applicants should ensure that they comply with all subsidiary legislation under the Act.

Capital Requirements

An Insurance Company is required to comply with the capital requirements established in the Solvency II Directive (2009/138/EC).

The Solvency II Directive introduced a two tier regulatory capital requirement, the lower Minimum Capital Requirement (MCR), and the upper level Solvency Capital Requirement (SCR).

The MCR is the minimum amount of capital the insurance company needs to cover its risks. The absolute floor of the MCR is as below:

Direct Insurer Absolute MCR
Life insurer €3.7million
Non – Life liability insurer €3.7million
Non-life other insurer (including captives) €2.5million



Reinsurer (both life and non- life) Absolute MCR
Captive reinsurer €1.2million
Reinsurer (excluding captives) €3.6million

Further information on the calculation of the MCR is provided in Article 129 of the Solvency II Directive.

The SCR is a risk responsive capital measure calibrated to ensure each insurer will be able to meet its obligations over the next 12 months with a probability of 99.5%.

Further information on the calculation of the SCR is provided in Chapter VI, Section 4 of the Solvency II Directive.

Read more about our approach to Solvency II here.

What do you need to submit?

An application pack is required to be submitted with all the relevant documents.

An application will not be considered complete if there are any outstanding documents.

The application pack must consist of:

  • Application Fee
  • Application Form
  • Business Plan, including;
    • A scheme of operations in accordance with Article 23 of the Solvency II Directive
    • Details on how the firm complies with the system of governance referred to in Chapter IV, Section 2 of the Solvency II Directive
  • Financial projections for the next 3 years;
    • Profit and loss account
    • Balance sheet
    • Returns (these need to be on a quarterly basis for the first year and then annually for the following 2 years)
    • Solvency Capital Requirement forecast submitted on a “best-endeavours” basis. The firm’s figures should reflect their projected risks over the next 3 years as a best estimate and ensuring that there is sufficient capital assessed against the type of firm. This is in accordance with the technical standards published by the European Insurance and Occupational Pensions Authority (EIOPA) in April 2014.
  • Notification documents (for all notifiable individuals and entities)
  • Mapping assessment of how the application meets the relevant legislative threshold requirements (i.e. statutory/regulatory criteria for licensing under relevant Act/s)

Any other document the applicant considers the GFSC should take into consideration as part of the application.

Business Plan

The business plan should clearly and comprehensively set out:

  • What services the firm intends to carry out and how it proposes to conduct the activity
  • Structure charts outlining both in-house and outsourced operations
  • Board structure and terms of reference, including details of any sub-committees set up by the Board to assist it to carry out its duties
  • The firm’s risk management function
  • An assessment of the main risks facing the firm and how these are to be mitigated
  • The resources that are to be made available and the systems that the applicant intends to employ
  • Target market
  • How clients will be sourced
  • How records will be maintained
  • How, and by whom, any significant decisions will be made
  • Details of outsourcing arrangements and how the firm will monitor and oversee these, including the controls implemented by the firm on these arrangements
  • Reinsurance information
  • If the applicant forms part of a larger group, details should also be provided of the activities of the group and a description of its structure.

The GFSC will be seeking evidence that the firm has considered the risk, compliance and operational issues associated with the proposed activities, as well as evidence that these have been documented and implemented.

Cells

In order for the GFSC to be able to consider the approval of a new cell, the following documents need to be submitted:

Any other document the applicant considers the GFSC should take into consideration as part of the application.

An application will not be considered complete if there are any outstanding documents.

Application Forms

Should you get an error when opening any of the forms, please check the FAQ tab for guidance on how to override this.



 

RGP Vetting Form

Please note that an 'Individual Questionnaire' or a 'Notifiable Document' MUST be accompanied by a Royal Gibraltar Police Vetting Application Form in accordance with Section 30C of the Proceeds of Crime Act 2015.  The form must be submitted to the Gibraltar Financial Services Commission, who will liaise with the RGP in order to make the relevant enquiries.

For any applicant that is not a Gibraltarian, or has not lived in Gibraltar for the last 10 years, in addition to the RGP vetting form, he/she must also provide the GFSC with a report of their criminal record from the relevant authority in the jurisdiction/s in which they have been ordinarily resident for the last 10 years and/or from any other jurisdiction where the applicant has spent a considerable amount of years resident in the past.  If the report is not in English, this must be accompanied by a translation from a certified Translator.

 

Notes for completion of the Royal Gibraltar Police Vetting Application Form:

1.     The RGP Vetting Form must be completed by the applicant in full. Should any section be incomplete, this cannot be accepted. 

Note that the section in the form that states ‘To be completed by agency or organisation requiring vet’ should be left blank as this section is to be completed by the GFSC only. 

2.     All RGP Vetting Forms MUST be submitted together with the applicable Individual Questionnaire or Notifiable Document to which it relates. 

Please note that all applications/fit and proper assessments will be kept on hold and not be processed until the original RGP Vetting Form and fee is submitted together with the applicable Individual Questionnaire or Notifiable Document. The same will apply to any incorrect forms submitted.

Should exceptional circumstances apply, please contact authorisations@gfsc.gi 

3.     The RGP and Individual Questionnaire or Notifiable Document cannot be accepted without any of the following:

a)    Payment of the £10 applicable fee by bank transfer only; and

In order to obtain the relevant bank details, please liaise with the member of staff at the GFSC who is processing the application and they will provide you with the required information. Should you be unsure of the contact details, then please refer your query to authorisations@gfsc.gi 

b)    APPLICATION Reference number. 

This reference number MUST be quoted in the payment reference for any bank transfer. Should you have numerous payments to settle due to a large number of applications, or find that you are unable to include all relevant references within the payment details, please ensure that you communicate this to the member of staff at the GFSC who is processing your application. We will require an e-mail confirming the applicable reference numbers that correlate to each individual, notifiable applicant or RGP Vetting Form.

 

For any further queries, please contact authorisations@gfsc.gi and a member of staff will be happy to assist. 

 

 

Form 1 - General Insurance Business Application

Documents referred to in the application form must be clearly referenced to help us process the application swiftly.

 

Form 5 - Long Term Business Application

Documents referred to in the application form must be clearly referenced to help us process the application swiftly.

  Notification Doc 1 Individuals Proposed Managing Director Chief Executive Principal
  Notification Doc 2 Individuals as a Proposed Controller (Other than Managing Director or Chief Executive)
  Notification Doc 3 Individual as a Proposed Chief Executive of a parent company (being an insurer) of the licenced insurer
  Notification Doc 4 Individual Appointed as Director Manager Authorised Gibraltar Representative
  Notification Doc 5 Body Corporate as Proposed Managing Director Chief Executive
  Notification Doc 6 Body Corporate as Proposed Controller (Other than Managing Director or Chief Executive) of the licenced Insurer or Insurers
  Notification Doc 7 Body Corporate Appointed as a Director Manager Authorised Gibraltar Representative Section 24B(4)(c) Employee of the Licenced Insurer
  Notification Doc 8 Body Corporate or Individual who has become a Controller
  Notification Doc 9 Body Corporate or Individual who has ceased as Controller
  Notification Doc 10 Body Corporate or Individual who has ceased as Director/Manager/Authorised Gibraltar Representative/Section 24B(4)(c) Employee of the licenced insurer
  Notification Doc 11 Notification of change of main agent of the Insurer

Returns

  Return for captive insurers
  Return for General Business Insurers and Reinsurers

Insurance Companies

Application Fees

The application fee must accompany your application. Please note, if you are applying for more than one licence, aggregate fees will apply.

Type Nature of Application Application Fee
Insurance Company (Non-life) (Insurer or Reinsurer, whether or not structured as a PCC) Application to be Licensed £10,000
Insurance Company (Life) (Insurer or Reinsurer, whether or not structured as a PCC) Application to be Licensed £15,000
Insurance Company (Life or Non-life) (Insurer or Reinsurer, whether or not structured as a PCC) Application for approval of a new class of business £5,000
Insurance Company (Life or Non-life) (Insurer or Reinsurer, structured as a PCC) Application for approval of an additional PCC Cell £2,500

Annual Fee

The annual fee is not payable until your application is approved. For details of these please refer to the current Fee Regulations.

Under the GFSC’s annual fee methodology you pay a minimum base fee which is dependent on the set fee block assigned to your regulated sector. In addition to the base fee, you are also required to pay an additional amount that will be calculated based upon a range of factors including activity and income. To calculate the additional part of your annual fee the GFSC will need to review audited financial data and/or supervisory returns. At licensing stage, you will not yet have the requisite audited financial data or supervisory returns available for the GFSC to calculate the additional part of your annual fee. On this basis, the GFSC will only require you to pay the base fee at this stage and, towards the end of the GFSC’s financial year end (31 March), you will then be invoiced for the remainder of the annual fee which will be calculated based upon the financial data and/or supervisory returns provided by you up until that date.

Details on the payment methods can be requested from the Accounts team.

Service Level Standards

The current service level standards for Insurance Companies are:

  • To provide initial feedback to an application within 9 weeks of a complete application being received.
  • Once all of the information has been received from an applicant and the application is therefore considered to be complete, we aim to provide an in principle decision within 9 weeks.

Please be advised that the above service level standards refer to the period of time in which the GFSC holds applications for consideration. Where we require further information or documents from an applicant the service level standards will be suspended until we receive the requested information. The period of time an application is pending because of factors outside the control of the GFSC will not be accounted for under the service level standards.

Please note that should we be unlikely to meet our SLS’s, we will advise you as soon as possible.

Nonetheless, we are open to working with the applicant to establish bespoke timescales, were possible, for the processing of the application in line with the applicant’s project plan. During this process we will endeavour to stage the review of the application and the issuance of our feedback to allow for us to work simultaneously with the applicant.

The current service level standards for Cell authorisations are:

  • To provide initial feedback to an application within 1 week of a complete application being received.
  • Once all of the information has been received from an applicant and the application is therefore considered to be complete, we aim to provide an in principle decision within 2 weeks.

The purpose of this page is to set out:

  • What is an extension?
  • What do you need to submit?
  • Guidance

What is an extension?

Firms or individuals that are already licensed by the FSC may apply to extend their authorisation/licence to provide additional financial or professional services.

If you are seeking a licence, authorisation or registration under a separate Act, please contact the Authorisation team so that we can determine what documents you are required to submit.

What do you need to submit?

An application pack is required to be submitted with all the relevant documents.

An application will not be considered complete if there are any outstanding documents.

The application pack must consist of:

  • Application Fee (if applicable)
  • Revised Business Plan
  • Financial projections for the the next 3 years, clearly identifying the impact of the additional business
    • Profit and loss account
    • Balance sheet
    • Returns (these need to be on a quarterly basis for the first year and then annually for the following 2 years)
  • Individual Questionnaires (for any new individual holding a notifiable position)
  • Body Corporate Questionnaires (for any new entity within the structure)
  • Trust Questionnaire (if applicable)

Any other document the applicant considers the FSC should take into consideration as part of the application.

Guidance

The licensee should consider and provide information on the following:

  • What new licence/authorisation it requires
  • The type of new business/activity
  • Where the business will be sourced
  • Resources to deal with the additional business
  • The impact of the additional business on its capital requirements
  • What changes are being effected to its systems and controls.