The Solvency 2 and Insurance (Amendment, etc.) (EU Exit) Regulations 2019U.K.
This section has no associated Explanatory Memorandum
10.—(1) The Solvency 2 and Insurance (Amendment, etc) (EU Exit) Regulations 2019 are amended as follows.
(2) In regulation 7(2), in the new paragraph (1)—
(a)insert, at the appropriate places—
““financial conglomerate” has the meaning given in regulation 1(2) of the Financial Conglomerates and Other Financial Groups Regulations 2004 , as amended by the Financial Conglomerates and Other Financial Groups (Amendments etc.) (EU Exit) Regulations 2019 ;
“FSC” means the Financial Services Commission of Gibraltar”;
“Gibraltarian insurance undertaking” means an undertaking which—
(a)has its head office in Gibraltar;
(b)is authorised by the FSC to carry on one or more classes of insurance business within the meaning of section 2(1) of the Financial Services (Insurance Companies) Act of Gibraltar ; and
(c)would require authorisation in accordance with Article 14 of the Solvency 2 Directive if the United Kingdom were a member State;”;
““Gibraltarian reinsurance undertaking” means an undertaking which—
(a)has its head office in Gibraltar;
(b)is authorised by the FSC to carry on insurance business limited to reinsurance within the meaning of section 2(1A) of the Financial Services (Insurance Companies) Act of Gibraltar; and
(c)would require authorisation in accordance with Article 14 of the Solvency 2 Directive if the United Kingdom were a member State;”;
““mixed financial holding company” means a parent undertaking other than a regulated entity, which, together with its subsidiaries, at least one of which is a regulated entity which has its head office in the United Kingdom or in Gibraltar, constitutes a financial conglomerate;”;
(b)in the definition of “insurance holding company”—
(i)after “reinsurance undertakings, the first time it occurs, insert “ or Gibraltarian insurance or reinsurance undertakings, ”;
(ii)at the end insert “ or a Gibraltarian insurance or reinsurance undertaking ”;
(c)in the definition of “mixed-activity insurance holding company”—
(i)after “reinsurance undertaking”, the first time it occurs, insert “ or Gibraltarian insurance or reinsurance undertaking ”;
(ii)at the end insert “ or a Gibraltarian insurance or reinsurance undertaking ”;
(d)in the definition of “non-UK solvency 2 parent”, in paragraph (b), at the end insert “ and Gibraltar ”;
(e)in the definition of “regulated entity” insert at the end “ (as amended by the Financial Conglomerates and Other Financial Groups (Amendments etc.) (EU Exit) Regulations 2019), read as if the reference in paragraph (b) of that definition to insurance undertakings and reinsurance undertakings included a reference to Gibraltarian insurance undertakings and Gibraltarian reinsurance undertakings ”;
(f)in the definition of “third country”, at the end, insert “ or Gibraltar ”;
(g)in the definition of “third country insurance undertaking”, at the end insert “ but does not include a Gibraltarian insurance undertaking ”;
(h)in the definition of “third country reinsurance undertaking”, at the end insert “ but does not include a Gibraltarian reinsurance undertaking ”;
(i)in the definition of “UK solvency 2 parent”, after “United Kingdom” insert “ or Gibraltar ”.
(3) In regulation 8(3), after new regulation 4B, insert—
“Powers in relation to Gibraltar undertakings
4C.—(1) If this regulation applies, the PRA may impose any requirement in relation to a Gibraltarian insurance undertaking or a Gibraltarian reinsurance undertaking (the Gibraltarian undertaking) which it could impose if—
(a)the undertaking's permission was a Part 4A permission (as defined by section 55A(5) of FSMA ); and
(b)the PRA was entitled to exercise its power under section 55M(3) of FSMA.
(2) This regulation applies if—
(a)the Gibraltarian undertaking is contravening, or is at material risk of contravening, in respect of its activities in the United Kingdom, any requirement applying to that undertaking in or under these Regulations, the Solvency 2 Regulation, or UK law which implemented the Solvency 2 directive (“a relevant requirement”);
(b)the undertaking has, in purported compliance with any relevant requirement imposed on it, knowingly or recklessly given the PRA information which is false or misleading in a material particular; or
(c)subject to paragraph (3), it is desirable to impose the requirement in order to advance any of the PRA's objectives.
(3) The PRA may not impose a requirement in reliance on paragraph (2)(c) if doing so would, before [IP completion day], have been considered to constitute financial supervision of the undertaking unless the conditions in paragraph (4) are satisfied.
(4) The conditions in this paragraph are satisfied if—
(a)the requirement to be imposed is necessary and appropriate to protect against the risk of disruption to the continuity of financial services that could, in the opinion of the PRA, threaten financial stability in the United Kingdom;
(b)the FSC has not, in the opinion of the PRA, taken measures to ensure the contravention or risk of contravention is remedied; and
(c)no reorganisation measures have been commenced by the FSC or other authorities in Gibraltar in relation to the undertaking.
(5) For the purposes of this regulation, “reorganisation measures” means any measures by the FSC or other Gibraltarian authorities which are intended to preserve or restore the financial situation of the Gibraltar insurance or reinsurance undertaking concerned (“the relevant undertaking”) and which affect pre-existing rights of parties other than the relevant undertaking itself, including but not limited to measures involving the possibility of a suspension of payments, suspension or enforcement measures or reduction of claims.
(6) Nothing in this regulation affects the powers of the FSC or any other Gibraltarian authority.
Procedure on the exercise of powers under regulation 4C
4D.—(1) A requirement takes effect—
(a)immediately, if the notice given under paragraph (3) states that that is the case;
(b)on such date as may be specified in the notice; or
(c)if no date is specified in the notice, when the matter to which it relates is no longer open to review.
(2) A requirement may be expressed to take effect immediately (or on a specified date) only if the PRA, having regard to the ground on which it is exercising the power under regulation 4C, considers that it is necessary for the requirement to take effect immediately (or on that date).
(3) If the PRA proposes to impose a requirement under regulation 4C on a Gibraltar insurance or reinsurance undertaking, or imposes such a requirement with immediate effect, it must give the undertaking written notice.
(4) The notice must—
(a)give details of the requirement;
(b)inform the undertaking of when the requirement takes effect;
(c)state the PRA's reasons for imposing the requirement and for its determination as to when the requirement takes effect;
(d)inform the undertaking that it may make representations to the PRA within such period as may be specified in the notice (whether or not it has referred the matter to the Upper Tribunal); and
(e)inform it of its right to refer the matter to the Upper Tribunal.
(5) The PRA may extend the period allowed under the notice for making representations.
(6) If, having considered any representations made by the undertaking, the PRA decides—
(a)to impose the requirement proposed, or
(b)if it has been imposed, not to rescind the requirement,
it must give the undertaking written notice.
(7) If, having considered any representations made by the undertaking, the PRA decides—
(a)not to impose the requirement proposed,
(b)to impose a different requirement from that proposed, or
(c)to rescind a requirement which has effect,
it must give it written notice.
(8) A notice given under paragraph (6) must inform the undertaking of its right to refer the matter to the Upper Tribunal.
(9) A notice under paragraph (7)(b) must comply with paragraph (4).
(10) If a notice informs a person of the person's right to refer a matter to the Upper Tribunal, it must give an indication of the procedure on such a reference.”
(4) In regulation 9—
(a)in paragraph (2), in the new regulation 9A—
(i)for paragraph (a), substitute—
“(a)insurance or reinsurance undertakings—
(i)which are a participating undertaking in at least one insurance undertaking, reinsurance undertaking, Gibraltarian insurance undertaking, Gibraltarian reinsurance undertaking, third-country insurance undertaking or third-country reinsurance undertaking; or
(ii)the parent undertaking of which is a Gibraltarian insurance undertaking or a Gibraltarian reinsurance undertaking;”
(ii)in paragraph (b), after “United Kingdom” insert “ or Gibraltar ”;
(b)in paragraph (2), in the new regulation 9B—
(i)in the opening words, after “reinsurance undertaking” insert “ , or participating Gibraltarian insurance or reinsurance undertaking ”;
(ii)after sub-paragraph (a), insert—
“(aa)another Gibraltar insurance or reinsurance undertaking;”;
(iii)in the words after sub-paragraph (c)—
(aa)after “United Kingdom” the first time it occurs, insert “ or Gibraltar ”;
(bb)for the words from “ultimate” to the end of the regulation, substitute “ ultimate UK solvency 2 parent which has its head office in the United Kingdom or in Gibraltar. ”.
(c)in paragraph (3)—
(i)for sub-paragraph (b)(i), substitute—
“(i)in the first paragraph—
(aa)in sub-paragraphs (a) and (b), for “insurance undertaking or reinsurance undertaking” both times it appears, substitute “ insurance undertaking, Gibraltarian insurance undertaking, reinsurance undertaking or Gibraltarian reinsurance undertaking ”;
(bb)in sub-paragraph (a), for “an EEA State” substitute “ the United Kingdom or Gibraltar ”;
(cc)in sub-paragraph (b), after “reinsurance undertaking,” insert “ Gibraltarian insurance undertaking, Gibraltarian reinsurance undertaking, ””;
(ii)for sub-paragraph (c), substitute—
“(c)in Table 1, in the second row—
(i)for “EEA solvency 2 parent” both times it occurs, substitute “ UK solvency 2 parent ”;
(ii)after “in accordance with” insert “ the law of the United Kingdom or of Gibraltar which was relied on by the United Kingdom or Gibraltar respectively immediately before [IP completion day] to implement ””;
(d)for paragraph (5), substitute—
“(5) Omit regulation 12 (exclusion of undertaking from group supervision).”
(e)after paragraph (5) insert—
“(5A) For regulation 13, substitute—
“13. The PRA may supervise an ultimate UK solvency 2 parent at group level in the United Kingdom where—
(a)the ultimate UK solvency 2 parent has its head office in Gibraltar; and
(b)the PRA is not the group supervisor.”
(5B) For regulation 14, substitute—
“14.—(1) The PRA must follow the procedure set out in this regulation when supervising an ultimate UK solvency 2 parent under regulation 13(1).
(2) Before deciding to exercise supervision, the PRA must consult the FSC and the ultimate UK solvency 2 parent.
(3) If the PRA decides to exercise supervision, the PRA must explain its decision to both the FSC and the ultimate UK solvency 2 parent.
(4) The PRA must recognise and apply any permission granted pursuant to the laws of Gibraltar which were relied on immediately before [IP completion day] to implement Article 231 or 233(5) of the Solvency 2 Directive, as those laws are amended from time to time, to the ultimate UK solvency 2 parent to calculate the group solvency capital requirement for insurance undertakings, reinsurance undertakings, Gibraltarian insurance undertakings and Gibraltarian reinsurance undertakings in the group on the basis of an internal model.””
(f)in paragraph (6), in new regulation 15(1)(c), for “that is authorised by the PRA” substitute “ , Gibraltarian insurance undertaking or Gibraltarian reinsurance undertaking ”;
(g)in paragraph (7), substitute—
“(7) In regulation 16 (choice of method)—
(a)in paragraph (1), for “and the other supervisory authorities” substitute “ and the FSC, if the FSC is ”;
(b)in paragraph (2)—
(i)in the opening words, for “EEA” substitute “ UK ”;
(ii)omit sub-paragraph (b).”;
(h)in paragraph (8)—
(i)for sub-paragraphs (a) and (b), substitute—
“(a)in paragraph (2)(b)(ii) and (iii), for “a supervisory authority” substitute “the PRA (or, if paragraph (5) applies, the FSC);
(b)in paragraph (3), for “and the other supervisory authorities concerned in the supervision of the group”, substitute “ and, if paragraph (5) applies, the FSC ”;”;
(ii)in sub-paragraph (c), in the text inserted by that sub-paragraph, insert after paragraph (4)—
“(5) This paragraph applies if—
(a)the FSC is concerned in the supervision of the group; or
(b)the group contains a Gibraltarian insurance undertaking or a Gibraltarian reinsurance undertaking.”;
(i)for paragraph (9), substitute—
“(9) In regulation 18 (related undertakings: calculation of group solvency)—
(a)in paragraph (1)—
(i)in sub-paragraph (b), after “reinsurance undertakings” insert “ Gibraltarian insurance undertakings, Gibraltarian reinsurance undertakings ”;
(ii)in sub-paragraph (e), for “an EEA State other than the United Kingdom” substitute “ Gibraltar ”;
(b)in paragraph (2)(a), for “that EEA State” substitute “ Gibraltar ”.”;
(j)in paragraph (10)—
(i)for sub-paragraph (a), substitute—
“(a)in paragraph (1)(b)—
(i)for “or reinsurance undertaking” substitute “ , reinsurance undertaking, Gibraltarian insurance undertaking or Gibraltarian reinsurance undertaking ”;
(ii)for “which is a participating undertaking in” substitute “ for which the calculation of the group solvency includes ”;”;
(ii)in sub-paragraph (d), in the new paragraph (3)(b), after “or reinsurance undertaking” insert “ or Gibraltarian insurance or reinsurance undertaking ”;
(k)after paragraph (10) insert—
“(10A) After regulation 19, insert—
“Gibraltar undertakings: calculation of group solvency
19A.—(1) This regulation applies where—
(a)the PRA is the group supervisor of a group;
(b)the group contains—
(i)a Gibraltarian insurance undertaking,
(ii)a Gibraltarian reinsurance undertaking, or
(iii)an insurance undertaking or a reinsurance undertaking for which the calculation of the group solvency includes an undertaking in paragraph (i) or (ii).
(2) The PRA must permit the group to take into account laws adopted by Gibraltar in respect of the group's solvency capital requirement and the own funds eligible to satisfy the solvency capital requirement in the calculation of the group's solvency.”.”;
(l)in paragraph (11)—
(i)in sub-paragraph (a)(ii), for sub-paragraph (aa), substitute—
“(aa)for “supervisory authorities concerned” substitute “ PRA or, where there is a Gibraltarian insurance undertaking or a Gibraltarian reinsurance undertaking, the FSC ”;”
(ii)for sub-paragraph (d), substitute—
“(d)in paragraph (5), for the words from the beginning to “supervising a group,” substitute “ Where the FSC is the group supervisor ”.”;
(m)in paragraph (13)—
(i)after sub-paragraph (a), insert—
“(aa)after paragraph (1), insert—
“(1A) For the purposes of paragraph (1), references to insurance undertakings and reinsurance undertakings include a reference to Gibraltarian insurance undertakings and Gibraltarian reinsurance undertakings.””
(ii)for sub-paragraph (b), substitute—
“(b)in paragraph (2), for “and the other supervisory authorities concerned in the supervision of the group” substitute “ and, where the FSC is concerned in the supervision of the group, the FSC ”;”;
(iii)for sub-paragraph (c), substitute—
“(c)in paragraph (3)—
(i)for “PRA is not” substitute “ FSC is ”;
(ii)for “PRA is consulted by the group supervisor” substitute “ the FSC consults the PRA ”.”;
(n)in paragraph (15), in the new regulation 26—
(i)renumber the existing provision as 26(1);
(ii)at the beginning of the paragraph, insert “ Subject to paragraph (2), ”;
(iii)after the renumbered paragraph (1), insert—
“(2) The FSC is the group supervisor and must supervise that group where the group includes a Gibraltarian insurance undertaking or a Gibraltarian reinsurance undertaking and—
(a)the FSC was designated as the group supervisor under Article 247 of the Solvency 2 Directive before [IP completion day]; or
(b)the PRA and the FSC have agreed that the FSC is to be the group supervisor.”
(5) In regulation 10(2), for sub-paragraph (b), substitute—
“(b)in paragraph (1)—
(i)omit “and in Schedules 4 and 5”;
(ii)in sub-paragraph (i) of the definition of “group application”, for “and reinsurance undertakings” substitute “ , reinsurance undertakings, Gibraltarian insurance undertakings and Gibraltarian reinsurance undertakings ”.”
Textual Amendments
Commencement Information
Marginal Citations