GIM10070 - Non-resident insurers: regulatory background: EEA insurers: FSA requirements on “branches”, “provision of services” and “Treaty firms”

Branches

The only requirements placed on EEA firms which are EEA insurers by FSMA are those set out in Part 2 Schedule 3. An EEA firm seeking to establish a branch in the UK must meet certain conditions. The FSA must receive a consent notice from the home state containing (among other things) a scheme of operations setting out the type of business to be carried on and the structural organisation of the branch. It must also receive a statement from the home state regulator that the company meets the minimum solvency requirements of the directive (paragraph 13 Schedule 3 FSMA and regulation 2(5) FSMA 2000 (EEA Passport Rights) Regulations 2001 (SI2001/2511)).

Provision of services

In the case of provision of services, the EEA firm must meet a number of conditions including the requirement that the FSA must receive a consent notice from the home state. This should contain (among other things) a statement of the classes of business which the firm is authorised to carry on in accordance with Article 6 of the First Non-Life Insurance Directive, and the nature of the risks or commitments which the firm proposes to cover in the United Kingdom. It should also include a statement by the firm's home state regulator attesting that the firm has the minimum margin of solvency (paragraph 14 Schedule 3 FSMA and regulation 3(3) FSMA 2000 (EEA Passport Rights) Regulations 2001 (SI 2001/2511)).

Treaty firms

Schedule 4 to FSMA applies to “Treaty firms” – see GIM10040. The only requirements placed on Treaty firms by FSMA are those set out in Schedule 4. A Treaty firm seeking to establish a branch in the UK must meet certain conditions.

These include the requirement that it has home state authorisation to carry on the relevant business and that the FSA has received from the company a statement from the home state regulator that the company meets the minimum solvency requirements of the directive (paragraph 3 Schedule 4 FSMA).