Raising the game

Off-shore jurisdictions have come under fire in the past for having what some claim to be a soft-touch approach to regulation.

But the Financial Services Commission (FSC) in Gibraltar, which is currently home to 57 insurance companies, claims not to be cutting any corners to prove its independence by throwing its doors open to the International Monetary Fund review twice.

The most recent IMF findings, published in May, gave Gibraltar a clean bill of health, declaring it a well-regulated financial sector.

This is an especially important development as the tiny peninsula is in the midst of positioning itself as a financial services hub, moving away from its reputation as a tax haven.

In a detailed assessment report, the IMF concluded that the FSC had adequate powers, legal protection and financial resources to exercise its functions and powers and that it was operationally independent.

The IMF did, however, recommend the need to increase on-site visits to insurance companies and managers. It also suggested outsourcing this function.

In recent weeks, FSC chief executive Marcus Killick said the body would be increasing the strength of its supervisory staff from 24 to 28 by the year’s end.

Killick said: “This is what we call ‘patrolling the perimeter’. We check that those who claim to be registered in Gibraltar are in fact licensed to do so. Existing licensees act as our eyes and ears.

“There is nothing more disheartening than being attacked as money-laundering or unregulated on a website of a company claiming to be from Gibraltar.”

Chris Collins, head of insurance division at the FSC, said that of the 28 supervisory staff, five will be based in the insurance division. They will be engaged in prudential supervision and the conduct of on-site inspections.

Collins said: “The main challenge for the next year will be to increase the rate of on-site inspections and it is an area that I see scope for improvement.

“We need to increase quantity while not allowing quality to slip.”