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Gibraltar Allows PCCs To Write Third-Party Insurance

by Jason Gorringe, Lowtax.net, London
11 August, 2017

Gibraltar's Minister for Commerce, Albert Isola, has announced Protected Cell Companies (PCC) will be permitted to write third-party insurance business.

Prior to the announcement, third-party business was permitted under Gibraltar's PCC legislation but regulatory permission had been restricted. Earlier this year, Gibraltar's financial services regulator, the Gibraltar Financial Services Commission, undertook a review and concluded that third-party business could be permitted within Gibraltar PCCs, provided there were appropriate safeguards in place.

Commenting on the change, Isola said: "[The] Government fully supports the Commission's view that cells writing third-party business will need particularly close scrutiny and the cell's assets and reinsurance program will be crucial in determining if such business can be authorized. The approach to new applications will be heavily reliant on the quality of the business plan, the quality of the people and organizations involved, and a robust and comprehensive regulatory process. If all these aspects are satisfied then we are confident that Gibraltar PCCs can offer a flexible and secure platform for new third-party insurance business."

The Protected Cell Company is an entity designed to encourage growth of the captive insurance industry by bringing together captive promoters under a single corporate entity, while allowing assets to be segregated for satisfying third-party claims and limiting liability. Gibraltar was the first EU jurisdiction to introduce PCC legislation in 2001, and Gibraltar cells have been widely used for both cell captives and fronting cells. Since 2015 Gibraltar's insurance linked securities transactions have also been structured using PCC cells.

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