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

From HM Revenue & Customs · General Insurance Manual

Branches

The only requirements placed on EEA firms which are EEA insurers by the Financial Services and Markets Act 2000 are those set out in Part 2 of 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 2000 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 UK. 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 2000 and regulation 3(3) Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001 (SI 2001/2511)).

Treaty firms

Schedule 4 to FSMA applies to ‘Treaty firms’ – see GIM10040. The requirements set out there for a Treaty firm seeking to establish a branch in the UK include

  • 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 2000).