The Guernsey Financial Services Commission has launched a pilot scheme that quickly tracks pre-approval for insurance cells. The system was developed in consultation with the Guernsey Insurance Industry and its representative body, the Guernsey International Insurance Association.
The system of prior authorization enables the timely creation of new capture cells in existing protected cell companies. The system applies to insurance-licensed PCCs owned by an insurance manager and is available to prison cells who write a single series of general insurance operations to meet an urgent business need. It must meet the standard formula minimum capital requirements and prescribed capital requirements, without any regulatory adjustments available, according to Guernsey Finance.
GFSC said, “We are pleased to work with industry for this type of initiative in cases where it can be done without compromising policyholder protection.
GIIA President Mike Johns said the pilot would give managers a way to act quickly and avoid missed opportunities to help customers with urgent issues. “This flexible regulation strategy enables brokers and their clients to respond to adverse market developments up to the renewal date. This will be an invaluable tool that enables buyers to increase their control over difficult innovations during the current tough market cycle. Guernsey's proactive cellular strategy works, "he said.
The pilot system for pre-authorization for insurance cells is expected to run until the end of 2021
Kate Storey, partner at the Walkers law firm in Guernsey, who was involved, as part of the GIIA, in the initiative, "We proposed this new, rapid licensing system in response to the huge increase in demand for captive insurance vehicles, especially during the last twelve months, due to commercial insurance companies raising their prices and limiting available protection in the so-called hard market. By using a captive vehicle, a company can self-insure in a way that is tailored to its business and more cost-effective than through commercial insurance companies. "
She added:" Guernsey is already a global leader in the prisoner market and now offers the opportunity to set up and start writing an insurance policy in as little as 48 hours on a prior permit, provided the documentation accompanying the regime is provided to the Guernsey Regulatory Authority. 14 days after the start of operations. "
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