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Govt amends legislation to attract insurance managing general agents

Eyleen Gomez

The Gibraltar Government has amended insurance legislation to permit locally licensed insurance intermediaries to appoint an insurance manager.

This means Managing general agents (MGA’s), a category within the Gibraltar insurance intermediary sector will now be able to formally appoint insurance managers.

Previously MGA’s could use the services of insurance managers for specific functions but could not appoint a manager in a similar way to insurance companies.

“These changes formalise the ability for Gibraltar MGAs to use an insurance manager,” said the Minister for Digital and Financial Services, Albert Isola.

“MGAs play an important role in the insurance market and we are keen to increase the number operating from Gibraltar.”

“Our focus is on wholesale MGAs which work with authorised insurance brokers but we believe there are also opportunities for MGA incubators and more insurtechs to build their businesses here.”

“Insurance managers provide an essential role for many new applicants and are one of the compelling reasons for Gibraltar’s continued appeal to new insurance business. Despite the challenges faced by the international community this year, we have seen a significant interest in new insurance applications in 2020.”

In 1989 Gibraltar introduced legislation to allow insurance companies to appoint insurance managers to provide services such as accounting, book-keeping, company secretarial and a wide range of other activities.

These amendments formalise and regulate the outsourcing arrangements between insurance intermediaries and insurance managers.

It also introduces risk transfer requirements and outsourcing provisions into the Financial Services (Insurance Distribution) Regulations 2020.

In a statement the Government said Gibraltar’s long-term legal framework for UK market access is the Gibraltar Authorisation Regime (GAR) which forms part of the UK’s Financial Services Bill published on October 21, 2020.

The Government added that in the interim, market access continues to be the UK Statutory Instrument No. 589 of 2019 The Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019 as extended.

“The GAR sets out the unique long-term legal framework for Gibraltar financial services firms to access the UK based on the alignment of standards and cooperation,” the Government said.

“Gibraltar will be introducing its own reciprocal legislation for UK firms to access Gibraltar.”

The GFSC has also published new guidance the ‘Managing General Agent (MGA) - Expectations Paper’ that sets out the GFSC’s supervisory approach for MGAs.

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