Guernsey: Taking Advantage Of Change

Last Updated: 5 November 2008
Article by Richard Le Tocq

Most Read Contributor in Guernsey, September 2018

Originally published as the welcome note to the Captive Review, Guernsey Report, October 2008

Richard Le Tocq, chairman of the Guernsey Insurance Company Management Association (GICMA), discusses the number of challenges Guernsey faced in 2008, and how it turned change to its advantage

This year sees the Guernsey Insurance Company Management Association celebrate its 25th anniversary; having been formed three years before The Insurance Business (Guernsey) Law, 1986 was introduced.

It is both an honour and a pleasure to be added to the illustrious list of chairs. Of course, my mentor Nick Wild and his mentor John Parkinson having served 10 and 20 years earlier respectively would argue that recent chairs have it easy only having to serve one year.

Guernsey's pool of talented non-executive directors, serving on the boards of captives and commercial insurers, is now benefiting from the experience of a number of past chairs. It is this expertise and a solid infrastructure of service providers that makes Guernsey a premier international insurance centre.

The Guernsey Insurance Forum

Peter Niven and his team at Guernsey Finance have provided valuable support to GICMA in organising this year's Guernsey Insurance Forum (the Forum). Sir James Goldsmith's quote: "The ultimate risk is not taking a risk", is the inspirational theme for 2008.

This event has now been running for over a decade; originally in Guernsey, before moving to London in 2004. The change of venue was very well received by all attendees.

The Forum provides delegates and exhibitors with; the opportunity to buy and sell, valuable updates on key issues facing the industry, networking and educational sessions – all essential for continued professional development.

The last decade or so has provided an interesting number of challenges for the Guernsey captive sector and 2008 has been no different. As has been successfully demonstrated in history, Guernsey's captive insurance industry has been resilient, responsive and innovative, and has turned change to its advantage.

Impressively, the following list of such changes is not exhaustive:

  • A new zero-rated tax regime for licensed insurers;
  • Modernised Company Law and the creation of an enviable online company registry;
  • Updated Corporate Governance Code;
  • Incorporated Cell Companies (ICC's) added to the island's already successful Protected Cell Company (PCC) legislation;
  • Introduction of Own Solvency Capital Assessment (OSCA) to support Guernsey's risk-based approach to regulation.

Recent years have seen soft insurance markets and a slowdown in the rate of growth in the formation of new captives. However, the attractive flexibility of cells coupled with over a decade of experience in their structuring has seen new cell creation continue to rise, with over 350 cells in existence in Guernsey at 31 July 2008. Representatives from Willis, RSA and Peter Berring from De La Rue PLC will, in fact, be engaging in a healthy debate on managing risk in a soft market from a broker, insurer and captive owner perspective at this year's forum.

During 2008, Guernsey Finance has rebranded and promoted the original capabilities paper Guernsey – Where European Reinsurance and Capital Markets Converge commissioned by Nick Wild of JLT Insurance Management and Mark Helyar of Bedell Cristin, and incorporating contributions from many of the key players in the Guernsey insurance industry and service providers. Guernsey has a lot to offer reinsurers and investors (funds) seeking exposure to insurance risk via insurance-linked securities. The legal and regulatory environment on the island provides support to these transactions.

Guernsey has seen increased interest from reinsurers seeking to establish in/ relocate to the island and also from Lloyds syndicates. The Guernsey Financial Services Commission (GFSC) has approved and licensed Barbican Reinsurance Company Limited part of the Barbican Insurance Group, which trades as Syndicate 1955 at Lloyds. This year's forum will see David Reeves of Barbican and Mel Carvill of Generali exploring how and why Guernsey has gained its reputation for being a cut above the competition in meeting the ever-evolving needs of clients by providing innovative risk management solutions.

The insurance market will be watching with anticipation the impact of the global turmoil in the financial markets. Convergence of insurance markets and capital markets means that insurance capacity and pricing will undoubtedly be affected by the collapse of a number of high profile financial institutions. AIG's exposure to credit default swaps and sub-prime debt led to the downgrading by rating agencies. AIG has a significant involvement in many captive insurance programmes not only as a reinsurer but as a fronter too.

Prepared for change

Securing the fronting services of European licensed insurers will also provide an interesting challenge as we head towards the implementation of Solvency II. Will the number of insurers prepared to front decrease? How will the price of fronting be affected? And what about collateral requirements? Clearly, with the current cautious approach to counterparty exposure and increasing demands for effective capital utilisation, requests for increased collateral to support letters of credit, security interest agreements and insurance trusts will add to the demands on captives and their parents. The industry waits with interest to see how AIRMIC's Solvency II position paper is met.

IFRS 4 Insurance Contacts is expected in late 2009 for implementation in 2010/11. This could have a significant impact on how the results of insurance contracts are presented. Accounting is also witnessing convergence with UK GAAP and US GAAP moving towards international standards. PricewaterhouseCoopers will be providing a valuable update on this and other key accounting issues at this year's forum, which will close with a 'Captive Clinic' giving delegates a chance to pose questions to a professional panel on topics that may not have been covered during the day.

The UK and global economy have changed significantly over recent months, which leads us to conclude with some food for thought. To quote management guru Peter Drucker: "We know only two things about the future: It cannot be known, and it will be different from what exists now and from what we now expect." As the proactive and innovative nature of the Guernsey captive industry has proved, the challenge of an uncertain future is one that can be met with relish.

For more information about Guernsey's finance industry please visit www.guernseyfinance.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions