’There is the possibility for a future alignment between Gibraltar and the UK in the captive [sector],’ says minister
The UK Treasury has approved the development of a new captive regime in Gibraltar, the country’s minister for justice, trade and industry Nigel Feetham has said.
A captive firm is a wholly-owned subsidiary insurer formed to provide risk mitigation services for its parent company or related entities.
The new regime will sit outside the Gibraltar Authorisation Regime (GAR) arrangements, which are intended to provide a long-term legislative framework for financial services between Gibraltar and the UK.
“Therefore, it will allow us to disapply the onerous requirements under Solvency II that have no place in a captive arrangement,” Feetham told delegates at the InsurConnect Gibraltar conference yesterday (25 January 2024).
Solvency II governs the required reserving requirements for insurance and reinsurance undertakings in the EU.
Since Brexit, however, Solvency II reforms set out in the UK have been planned to adapt requirements for firms operating in the UK insurance market.
Next step
For Feetham, the next step is to set up a working group of local firms in Gibraltar within the insurance management sector that will discuss relevant provisions with him and the regulator.
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However, he also noted that there was a possibility to bring the new regime within Gar arrangements.
”As a policy commitment of this government, we will embark upon implementing a captive regime in Gibraltar that suits the needs of the international business community,” Feetham said.
“There is the possibility for a future alignment between Gibraltar and the UK in the captive [sector] to allow us to bring the regime within the Gar arrangements.”
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