The Insurance and Reinsurance Undertakings (Overseas Insurance Regime, Transitional Provisions, etc.) Regulations 2024

Interpretation

10. In this Part—

“group” has the same meaning as in the glossary of the PRA rules;

“insurance undertaking” has the meaning given in section 417(1) of FSMA 2000⁵;

“insurance group” means a group which contains one or more insurance undertakings or reinsurance undertakings;

“overseas insurance undertaking” means an undertaking with its head office in an overseas jurisdiction which if it was carrying on its activities in the United Kingdom would require authorisation for the regulated activity of effecting or carrying out contracts of insurance as principal under FSMA 2000;

“overseas jurisdiction” means a country or territory outside the United Kingdom or Gibraltar;

“overseas reinsurance undertaking” means an undertaking with its head office in an overseas jurisdiction which if it was carrying on its activities in the United Kingdom would require authorisation for the regulated activity of effecting or carrying out contracts of insurance that are limited to reinsurance contracts as principal under FSMA 2000;

“PRA rules” means the rules made by the PRA under FSMA 2000, as they have effect from time to time;

“reinsurance undertaking” has the meaning given in section 417(1) of FSMA 2000;

“territory” includes the European Union and any other international organisation or authority comprising countries or territories.

Designation of overseas jurisdiction

11.—(1) The Treasury may by regulations designate an overseas jurisdiction in relation to one or more of regulations 12, 13 or 14 (effects of the overseas insurance regime) (“overseas insurance regulations”).

(2) The Treasury may make overseas insurance regulations only if they consider that those regulations are compatible with—

(a)

(a) the protection of those who are, or may become, policyholders of an insurance undertaking or a reinsurance undertaking,

(b)

(b) the safety and soundness of insurance undertakings and reinsurance undertakings, and

(c)

(c) one or both of—

(3) When considering whether to designate an overseas jurisdiction, the Treasury may, in addition to any other matter they consider relevant, have regard to the law and practice of that overseas jurisdiction in relation to the following—

(a)

(a) the authorisation of undertakings effecting or carrying out contracts of insurance as principal;

(b)

(b) the supervision of, and enforcement of prudential requirements applying to, undertakings effecting or carrying out contracts of insurance as principal, including such supervision and enforcement at insurance group level;

(c)

(c) the holding of financial resources for the safety and soundness, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal, and for the protection of policyholders;

(d)

(d) the assessment, and disclosure, of the financial position, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal;

(e)

(e) the sound and prudent management, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal, such as requirements to have in place systems for governance, internal control and risk management;

(f)

(f) the handling and sharing of confidential information by public authorities (including any person currently or previously employed or instructed by them) supervising undertakings effecting or carrying out contracts of insurance as principal, including the sharing of information by such public authorities with other public authorities.

(4) In this regulation, “consumer” has the meaning given by section 1G(1) of FSMA 2000⁶.

Effect of designation: reinsurance contracts

12.—(1) Where regulations are in force under regulation 11 in respect of an overseas jurisdiction in relation to this regulation, the PRA must treat a reinsurance contract entered into by an insurance undertaking or reinsurance undertaking with an overseas reinsurance undertaking in that jurisdiction in the same manner as a non-overseas reinsurance contract for the purposes of the prudential regulation of the insurance undertaking or reinsurance undertaking.

(2) In this regulation, “non-overseas reinsurance contract” means a reinsurance contract entered into by an insurance undertaking or reinsurance undertaking with an insurance undertaking or reinsurance undertaking.

Effect of designation: insurance group capital requirements calculation

13.—(1) This regulation has effect where regulations are in force under regulation 11 in respect of an overseas jurisdiction (“the relevant overseas jurisdiction”) in relation to this regulation.

(2) Where this regulation has effect and paragraph (3) does not apply, the PRA must permit an insurance group that contains an overseas insurance undertaking or overseas reinsurance undertaking in the relevant overseas jurisdiction to take account of the law of the relevant overseas jurisdiction in the areas mentioned in paragraph (4) for the purposes of calculating the insurance group’s capital requirements.

(3) This paragraph applies where the PRA requires an insurance group to calculate its capital requirements on the basis exclusively of consolidated accounts (referred to as method 1 in the PRA rules).

(4) The areas of law mentioned in this paragraph are—

(a)

(a) the level of regulatory capital required to be held, and

(b)

(b) the types of capital eligible to meet that level.

Effect of designation: insurance group supervision

14.—(1) This regulation has effect where regulations are in force under regulation 11 in respect of an overseas jurisdiction (“the relevant overseas jurisdiction”) in relation to this regulation.

(2) Where this regulation has effect and paragraph (3) applies, the PRA must rely on the prudential supervision of an insurance group by the supervisory authority in the relevant overseas jurisdiction for the purposes of prudential supervision of the insurance group.

(3) This paragraph applies where—

(a)

(a) an insurance group has an ultimate parent with its head office in the relevant overseas jurisdiction,

(b)

(b) the sum of the balance sheet totals of all insurance undertakings and reinsurance undertakings in the insurance group is not greater than the balance sheet total of the parent undertaking less that sum,

(c)

(c) in the view of the PRA, the insurance group is subject to prudential supervision by the supervisory authority in the relevant overseas jurisdiction in accordance with the law of that jurisdiction relating to the prudential supervision of insurance groups, and

(d)

(d) in the view of the PRA, the PRA has entered into arrangements with that supervisory authority such that the PRA is able to comply with any restrictions on the handling and sharing of confidential information under FSMA 2000.

Overseas insurance regulations: procedure

15.—(1) The power to make regulations under...