A regulatory coup for Gibraltarian insurance business

'A regulatory coup for Gibraltarian insurance business as the English High Court sanctions the first Part VII transfer into the UK

In Provident Insurance plc and Others v The Financial Services Authority [2012] EWHC 1860 (Ch), an application was made to the High Court for directions on the application of Part VII of the Financial Services and Markets Act 2000 (FSMA) (Part VII) to a transfer of insurance business from a firm authorised in Gibraltar to a firm authorised in the United Kingdom. This was the first time that an English Court had been asked to consider whether it had jurisdiction to approve such a transfer.

The Background

Provident Insurance plc (Provident) and MMA Insurance plc (MMA) were both UK based, FSA authorised companies. Gateway Insurance plc (Gateway) was incorporated and authorised in Gibraltar, but carried out all of its business in the UK under the “passporting” rights conferred by the Financial Services and Markets Act 2000 (Gibraltar) Order 2001 (the Gibraltar Order). All three companies belonged to the same group.

The application before the Court concerned a scheme to simplify the legal structure of the group’s UK operations by concentrating its general insurance business into MMA, thus enabling the number of regulated entities in the UK to be reduced. This arrangement would require both Provident and Gateway to transfer all of their general insurance business to MMA.

Part VII FSMA 2000 To assist with the analysis of the Court’s decision, it is beneficial to set out the basic requirements for Part VII and the regime for effecting an insurance business transfer:....'