GUERNSEY Law and Practice Contributed by: Matthew Brehaut and Tom Carey, Carey Olsen
8. Insurtech 8.1 Underwriting Processes
A Guernsey protected cell company may be regulated to carry on both long-term and gen - eral business, but no other form of company is capable of being so licensed. Companies can and frequently do carry on both domestic and international business. 9. Regtech 9.1 Regulation of Regtech Providers Guernsey providers of regulatory technology ( “regtech” ) may fall to be regulated under one or more of Guernsey’s regulatory laws, depending upon their business model and whether or not they will conduct any of the activities referred to in 2.2 Regulatory Regime . If such providers will simply provide the software to enable other reg - ulated businesses to properly conduct their own activities, it is unlikely that they will be required to be licensed. 9.2 Contractual Terms to Assure Performance and Accuracy The contractual terms would typically be a mat - ter of industry custom and would cover the usual matters, such as fees, indemnities, termination provisions, and scope of work. The GFSC’s rules and guidance note on outsourcing require the contract to contain certain matters where the services are provided to entities that are regu - lated in Guernsey. Please refer to 2.8 Outsourc- ing of Regulated Functions . 10. Blockchain 10.1 Use of Blockchain in the Financial Services Industry Financial institutions such as banks and pay - ment service providers are implementing block - chain technology by streamlining payment sys -
Most insurers still use traditional paper-based underwriting approvals. However, some online portals are in use, with contracts being conclud - ed electronically on servers located in Guernsey. The analysis for this type of activity does not dif - fer markedly from the old-fashioned manual pro - cess, but its use has not yet been widespread. 8.2 Treatment of Different Types of Insurance The carrying on of insurance business is regu - lated in Guernsey by the Insurance Business (Bailiwick of Guernsey) Law 2002 (the “Insur- ance Business Law” ). The Insurance Business Law regulates “insurance business” (broadly, the business of accepting risks) carried on in or from within Guernsey, classifying such business as “long-term business” (life and annuity, marriage and birth, linked long-term, permanent health, capital redemption, pension fund management, and credit life assurance) or “general business” (ie, all other insurance business). There are some key differences between domes - tic and international underwriters. Domestic insurers are taxed at 10%, whereas internation - al insurers are taxed at 0%. As the name sug - gests, international insurers do not write any risks situated in Guernsey. Some of these risks are required to be insured with Guernsey-based or Guernsey-recognised insurers (such as motor vehicle third-party liability). Business is further divided into long-term and general, as noted earlier. The solvency require - ments applicable to long-term insurers differ markedly from those applicable to general insur - ers.
291 CHAMBERS.COM
Powered by FlippingBook