Gibraltar: Law of Offshore
Gibraltar insurance companies, including captives, are regulated by the Financial Services Commission under the Insurance Companies Ordinance 1987 (as updated) and the Financial Services Ordinance.
The 2nd and 3rd EU Insurance Directives have been implemented in Gibraltar, and the UK Government has agreed that Gibraltar's insurance regulatory regime matches UK practice; therefore the Single European Passport applies - EU insurers may write direct business into Gibraltar, and Gibraltar insurance companies can write direct business into other EU states.
Insurance companies in Gibraltar, including branches or subsidiaries of foreign insurers, require a license from the Commissioner of Insurance. The Commissioner will take into account the expertise, skill and experience of the proposed management team, the ability of an applicant to conform with prescribed EU guidelines including solvency margins and guarantee fund levels, and the availability of adequate reinsurance.
Initial application and annual fees are payable to the Commissioner. Licensed insurance companies are required to conform to the following ongoing supervisory regime:
- A place of business must be maintained in Gibraltar at all times;
- Insurance and accounting records must be maintained in Gibraltar;
- Financial statement must be submitted to the Commissioner within six months of the end of the insurer's financial year;
- Solvency margins and minimum guarantee funds must be maintained at all times; and
- Approval must be sought for all changes of director, manager or controller.
There are a number of sets of regulations dealing with the detailed conduct of insurance business in Gibraltar, some of them implementing EU legislation. The seven main sets are as follows:
- The Insurance Companies (Valuation of Assets and Liabilities) Regulations 1996;
- The Insurance Companies (Accounts and Statements) Regulations 1996;
- The Insurance Companies (Prescribed Particulars) Regulations 1996;
- The Insurance Companies (Accounts Directive) Regulations 1997;
- The Insurance Companies (Solvency Margins and Guarantee Funds) Regulations 1996;
- The Insurance Companies (Conduct of Business) Regulations 1996;
- The Insurance Companies (Prudential Supervision) Regulations 1997.
Insurance companies providing local services are taxable on their profits in the same way as ordinary companies (see Domestic Corporate Taxation); insurers working 'offshore' could traditionally apply for a tax exemption certificate (no tax payable at all) or a 'qualifying' certificate (see Offshore Legal and Tax Regimes) allowing them to pay tax at a rate between nil and 35% as agreed with the authorities.