The London Market is the international insurance market based in
London. This is a major market for both insurance and reinsurance.
Key players in the market are UK insurance companies, Lloyd’s
syndicates and foreign insurers. A number of non-resident companies
operate only at this level, doing no direct business and often
using the same managing agents as Lloyd's syndicates. Some of the
bigger non-resident companies in the London reinsurance market are
major reinsurers on a worldwide scale. Most of the UK companies in
this market also write direct business, but there are also some
pure reinsurers.
In the past many of the bigger non-life insurers carried on
business through branches (permanent establishments) overseas,
particularly in Commonwealth or ex-colonial territories. In the
late 1960s and early 1970s much of this business was transferred to
local subsidiaries, and much overseas business now takes this form.
Since the completion of the single internal market UK companies
authorised by the FSA to carry on insurance business in the UK are
no longer required to seek separate authorisation from the
equivalent regulator in any EEA state in which they wish to carry
on business through a branch. The EEA comprises the EU States
together with Iceland, Norway and Liechtenstein. Gibraltar is in a
special position. It is a Member State by virtue of its link with
the UK, but it is deemed to be a Member State other than the UK.
More detail at
GIM10030.
The position in relation to Switzerland is complex. There is
an agreement between the EEC (as it then was) and Switzerland made
on 10 October 1989, approved by the Council on 20 June 1991. It is
designed to consolidate practices between Switzerland and the EU
and remove obstacles to general insurance business between the
parties, while reserving sovereignty. In 2006 the Swiss reformed
their regulatory laws with a view to closer harmony, but the
concepts of single licence and home country control still do not
apply to Switzerland. An insurer properly licensed in its Home EU
State will still need a Swiss licence to conduct business to or
from a Swiss territory. This is subject to limited exemptions such
as writing pure reinsurance business, which is not supervised in
Switzerland. Switzerland does not recognise services business (
GIM10070); there must be a branch
operating there. And any insurers domiciled in Switzerland must
obtain EEA Host State regulatory approval.
