The HM Government of Gibraltar has introduced new legislation to permit European Economic Area (EEA) insurers to continue to provide specified insurance policies, including captive insurance, to the Gibraltar market after the end of the EU transition period.
The transition period between the UK and EU is set to end on 31 December 2020, with uncertainty still surrounding the type of deal that will be signed between the two unions.
The Government of Gibraltar stated that specified insurance means regulated insurance activity which the Gibraltar Financial Services Commission (GFSC) considers will enhance competition and increase choice for consumers in Gibraltar.
In addition, it was noted for the avoidance of doubt, UK insurance companies and insurance intermediaries have the right to transact insurance business in Gibraltar now and in the future.
Nigel Feetham, partner at Hassans International Law Firm, noted: “Gibraltar has a very substantial insurance industry (primarily focused on the UK motor market), there are not many Gibraltar insurers that underwrite local risks.”
He explained: “This means that underwriting capacity for some classes of local risks is provided mainly by (foreign) EEA insurers. Of course, EEA firms will post-Brexit, in the absence of an agreement between the UK and the EU (which looks increasingly likely), become third-country firms as a result of loss of EU passporting rights.”
Feetham argued that this is “an excellent example of the Government, GFSC and industry working together constructively to deliver a post-Brexit outcome which is good for Gibraltar, good for the insurance market and good for local consumers”.
“I am not sure there are many jurisdictions that can demonstrate this ability to act as quickly as Gibraltar in providing market certainty and doing so in such an efficient and business-friendly manner,” he added.
Albert Isola MP, Gibraltar’s minister for digital and financial services, stated: “The new regulations will enable EEA insurers to continue to provide insurance services to Gibraltar businesses and individuals in 2021.”
“We have agreed that whilst EEA insurers can continue to provide insurance cover they must work with a Gibraltar insurance intermediary. The regulations have been introduced to ensure we maintain competition and consumer choice in Gibraltar. During 2021 a long-term legal framework for EEA insurers will replace these temporary arrangements,” Isola added.