Nov 12 - GSD Seeks Government Clarification On Part VII Transfers
The Opposition says it has been approached by interested parties concerned that, notwithstanding the Government’s recent announcement that Part VII transfers could now take place between UK and Gibraltar insurers, the position is “still less than certain.”
What in the insurance industry is known as Part VII transfers is the statutory mechanism in the UK under which an insurer can make an application to the UK Court for the transfer, with regulatory approval, of an insurance portfolio to another insurance company. This has been used very successfully in cross border EEA transfers particularly for the insurance run off industry. This is a significant potential source of business for Gibraltar, according to the GSD.
It will be recalled, says the Opposition, that on 17 July 2014 the Government of Gibraltar issued a press statement confirming “that it has received written confirmation from HM Treasury, United Kingdom Government, that Part VII transfers can take place between the United Kingdom and Gibraltar insurers, subject to Court and Regulatory approval.”
The Minister for Financial Services, Albert Isola, was also quoted as saying that “this is superb news for our Insurance Sector who have been seeking to be able to carry out this business for many many years.”
Of course, Minister Isola was absolutely right, says the GSD; the insurance industry in Gibraltar have been seeking this for many years and it has long been seen as an anomaly given that Gibraltar insurers have EU passporting rights into the UK. However, it was widely believed that, absent a UK branch, Part VII transfers from a UK to a Gibraltar insurer required an amendment to the relevant UK legislation because, on the face of it, there was no statutory provision that provided that Gibraltar was to be treated as a separate Member State to the UK. So when Minister Isola made his announcement, there was an expectation that the UK Government would finally introduce the amendment to provide the industry with the legal certainty it was seeking. To date, the GSD understands that no amendment has been made and the Opposition therefore calls on the Government to clarify the position to ensure that interested parties have clarity on this important area of business.
