GIM10090 - Non-resident insurers: regulatory background: non-EEA insurers: general

A non-EEA firm (one that is neither an ‘EEA firm’ within GIM10030 nor a ‘Treaty firm’ within GIM10040) must obtain permission under Part 4 FSMA to carry on insurance business in the UK. The FSA Handbook (AUTH 3.18 – see GIM3060) imposes specific obligations for applicants (other than EEA firms, Treaty firms or Swiss general insurance companies) with a head office in a country of territory outside the United Kingdom seeking to establish a branch in the United Kingdom. Any such firm must satisfy the FSA’s ‘threshold conditions’ (see GIM3080) and its prudential requirements, and the FSA will take into account the worldwide circumstances of the applicant.

AUTH 3.12 imposes specific obligations on all applicants seeking to carry on insurance business and AUTH 3.12.14 imposes further obligations on applicants seeking to carry on insurance business with a head office outside the United Kingdom (other than EEA firms or Treaty firms).

COND 2.6 sets out the additional threshold conditions on non-EEA insurers required by The Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI2001/2507). This Order implements requirements under the Insurance Directives, and FSMA 2000 extends these requirements to non-EEA firms. A non-EEA insurer must:

• be a body corporate formed under the law of the country where its head office is situated
• appoint an authorised UK representative (this also applies to a Swiss General insurance company)
• have assets in the UK to a value specified in INSPRU, and where it wants to carry on insurance business in other EEA States, it must have assets in those other EEA States as agreed between the FSA and the supervisory authorities in the other States
• make a deposit of an amount, of type and on terms agreed with the FSA, and between the FSA and the supervisory authorities in the other EEA State - this deposit will be subject to provisions in INSPRU.

If business is carried on in the UK and other EEA States, the company will make its deposit in the UK and is known as a UK deposit insurer unless the FSA agrees that the deposit can be made in another EEA State, in which case it is known as an EEA deposit insurer.