This statement updates the announcement that Elite voluntarily decided to stop writing insurance as from midnight on 4 July 2017.
There have been a series of court proceedings in Gibraltar relating to Elite involving challenges to regulatory interventions by the Gibraltar Financial Services Commission (GFSC) and proceedings issued by the GFSC. The Gibraltar Supreme Court imposed confidentiality orders over the proceedings at Elite’s request. Elite has asked for the confidentiality restrictions to be lifted. The Gibraltar Supreme Court has now removed those restrictions as of 28 July 2017.
The GFSC has a range of powers to supervise insurance companies to ensure that they comply with the relevant regulations and requirements. The protection of current and future policy holders is central to the GFSC’s approach.
During the course of regular supervisory oversight, the GFSC identified risks arising from Elite’s governance, delegated underwriting and reserving processes. Since the middle of 2016 the GFSC has been working to make sure that Elite resolves these risks. The GFSC has been particularly concerned to ensure that Elite understands and resolves any implications for Elite’s capital adequacy and solvency. The GFSC’s work has been supported by PwC UK, who have been engaged in ‘Skilled Persons’ and ‘Inspector’ capacities (1).
The GFSC has recently taken certain regulatory actions to protect Elite’s current and future policy holders. These include issuing directions to inject capital and to cease writing new business, which Elite challenged in the Gibraltar courts. On 4 July Elite agreed to cease writing new business and entered into run-off. Elite has said that the run off will be solvent.
The individual directors have provided the GFSC with declarations of solvency and with a run-off plan for approval by the GFSC. The GFSC is reviewing Elite’s run-off plan and solvency declarations.
Elite’s cessation of new business includes the renewal of existing business and all business underwritten by way of delegated underwriting facilities e.g. Managing General Agents (MGAs).
Elite operates a branch network and also operates (passports) on a freedom of services basis in several European countries. The relevant European regulators in these countries have been advised of the situation and that Elite have ceased underwriting and are now in run-off.
The GFSC, the European Insurance and Occupational Pensions Authority (EIOPA) and European regulators are working together to ensure that existing policyholders experience minimal disruption and inconvenience as a result of this action.
(1) PwC UK were appointed as Skilled Persons on 31 March 2017 pursuant to section 7 of the Financial Services (Information Gathering and Co-Operation) 2013 and as Inspectors on 9 May 2017 pursuant to section 8 of the Financial Services (Information Gathering and Co-Operation) 2013.