Are there restrictions over who owns or controls insurers (including restrictions on foreign ownership)?

Insurance & Reinsurance

Ireland Small Flag Ireland

The authorisation process requires the submission of details of all of the entity’s proposed shareholders to the Central Bank. However, there are no restrictions on the ownership or control of an insurance or reinsurance undertaking, other than the requirement that the proposed controller must be of good standing. The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 have introduced increased disclosure requirements in respect of ownership of corporate entities. These regulations require entities to maintain a register of the beneficial owner (ie the natural person who ultimately owns or controls the share capital or the voting rights or has control by any other means of the undertaking) in order to ensure greater transparency of ownership.

Where there is a change in the ownership or control of a regulated entity, the 2015 Regulations require certain notifications to be made to the Central Bank. The acquisition or disposal of a ‘qualifying holding’, which is defined in the 2015 Regulations as a holding representing 10% or more of the capital or voting rights, or which makes it possible to exercise a significant influence over the management of the undertaking, triggers the requirement to notify the Central Bank. The Central Bank will assess any proposed acquisition by reference to the financial soundness and reputation of the proposed acquirer. In addition, the Central Bank will assess the suitability of all proposed directors and senior management in accordance with its Fitness and Probity regime to ensure the sound and prudent management of the undertaking.

United Kingdom Small Flag United Kingdom

It is a criminal offence to acquire or increase control in an insurer authorised in the UK without the prior approval of the PRA (with the consent of the FCA). A person will acquire control under FSMA where they hold 10% or more of the shares or voting power in an undertaking (or its parent company) or where it is able to exercise significant influence over the undertaking.

Approval by the PRA is also required when an existing controller proposes to increase their shareholding or voting power in an undertaking (or its parent company) above 20%, 30% or 50%.

The PRA may approve the change in control unconditionally, impose conditions or object to the acquisition.

There are no legislative restrictions on non-UK (or EU) nationals owning insurance companies.

Sweden Small Flag Sweden

Ownership Assessment
There are rules governing both how transactions regarding larger shares of capital or voting rights in insurance companies can be conducted, as well as who is allowed to acquire shares over certain sizes. It is therefore required to get the FSA’s approval before:

  • directly or indirectly acquiring 10 % or more of the share capital or voting rights of an insurance company, or otherwise acquiring the ability to materially influence an insurance company’s management,
  • increasing the shareholdings in an insurance company to more than 20 %, 30 % or 50 % of the company's share capital or voting rights, and
  • turning the insurance company into a subsidiary to another company.

The FSA will approve the acquisition if the acquiring party is deemed fit and proper and the acquisition is financially sound.

In its assessment, the FSA considers several factors, such as the acquirer's reputation, financial strength, and possible connections to money laundering or terrorist financing. Applications are typically handled within 60 to 80 days of receipt. The FSA can oppose the acquisition or change in control if there are reasonable grounds to do so.

The FSA's approval is not required for acquisitions or increases in control of non-EEA insurers that are active on the Swedish market, although such insurers must notify the FSA of the proposed acquisition or change in control.

There are no restrictions regarding foreign ownership.

Assessment of Ownership’s Management
A company having a qualifying holding in an insurance company under the FSA’s supervision shall notify the FSA, which then will assess the person’s experience and knowledge, when any of the following persons are appointed or changed:

  • chairman, member or alternate member of the board, or
  • executive director or his/her representative.

If such a person is a foreign citizen, the FSA will contact the relevant competent authority in that country to get necessary additional information. There are, however, no restrictions regarding foreign ownership or management, other than the residence requirement in the Swedish Companies Act (SFS 2005:551), requiring at least half of the board of directors to reside within the EEA.

Germany Small Flag Germany

Under section 16, in connection with section 7, No 3 of the German Insurance Supervision Act, the direct and indirect acquirer of at least 10% of the equity interests or voting rights in an insurer (and each of its directors) must fulfil the requirements necessary for the reasonable and prudent management of an insurance company and be trustworthy. Approval by BaFin is also required when an existing controller of a qualifying holding (which may also consist of several persons acting in concert) proposes to increase its holding above 20%, 30% or 50%.

Norway Small Flag Norway

An entity who wants to become owner of a qualified holding of an insurance company's shares or votes must obtain permission from the Ministry of Finance, pursuant to chapter 6 of the Financial Institutions Act. Qualified holdings are shareholdings that represent 10% or more of the insurance company's shares or votes, with further thresholds at 20%, 30% and 50 %.

The evaluation of whether permission shall be granted is based on a number of criteria, where an important factor is whether the entity is regarded as fit and proper to own such holdings (see also question 13 below).

Owners of a qualified holding, who want to reduce the holding, or reduce a qualified holding to a level below a threshold, must notify the FSAN in advance. If the sale will take place outside a regulated market (stock exchange), the FSAN must also receive specified information on the new owner of the shareholding.

There are no specific restrictions on foreign ownership under Norwegian law.

Mexico Small Flag Mexico

There are currently no restrictions to foreign investment in insurance companies. In all cases, the CNSF must approve ownership and control of insurance companies incorporated in Mexico. The respective application must include the following information:

  1. Nationality.
  2. Amount of shares they will acquire and source of the assets to acquire such shares.
  3. Economic reports or financial statements for the last three years.
  4. Evidence of good credit reputation and financial capability.

The CNSF must approve any purchase of more than 5% of the shares of an insurance company. The respective application must include the information set forth above.

For purchases of 20% or more, the application should also include, inter alia, the information set forth above and in additional, information on the candidates to be appointed as directors, officers and manager of the insurance company.

UAE Small Flag UAE

Article 24 of the Federal Law No. 6 of 2007 provides that only (i) public stock companies established in the UAE, or (ii) branches of foreign insurances companies, or (iii) insurance agents are allowed to carry out insurance and re-insurance operations in the UAE. Additionally, as per IA Resolution No. 42 of 2009, it is mandatory that insurance companies incorporated in the UAE have at least seventy-five percent (75%) of their capital owned by UAE or GCC nationals or by juristic entities wholly owned by them.

For other entities engaged in onshore UAE insurance related activities, such as brokering and third party claims administration, the UAE Commercial Companies Law requires that the LLC that holds the license must be at least 51% owned by a UAE or GCC National or juristic entity wholly owned by such nationals.

The DIFC does allow 100% foreign ownership, but the activities of free zone entities are limited as set forth above.

United States Small Flag United States

State insurance laws regulate who may own or control an insurance company by imposing pre-approval requirements for the formation and incorporation of new insurers and for any change of control of existing insurers.

Insurance companies may be formed under a state’s insurance laws, corporation laws or both. Insurance laws generally require that the proposed officers and directors of a newly formed insurer and the individuals who directly or indirectly would control the newly formed insurer disclose their background information, including professional and financial history and administrative proceedings or criminal enforcement actions relating to their trustworthiness and character. The information is used by state insurance departments to conduct criminal and financial background investigations, and some states also require that proposed officers and directors submit fingerprints as part of the investigation.

More than half of the states restrict or prohibit the licensing of insurers that are owned or controlled by government entities. Such restrictions most often impact acquisitions of U.S. insurers by non-U.S. persons. In recent years, however, many of these laws have been relaxed so that they prohibit acquirers only if they are both government-owned and benefit from a government subsidy.

Many of the same requirements and restrictions that apply to the regulatory review of proposed officers, directors and the individuals who directly or indirectly would control the newly formed insurance company also apply when there is a change of control of an insurer. Ultimate controlling persons are also required to provide audited financial statements as part of their application and to disclose their plans for the target insurer. A change of control of an insurer is subject to prior approval by the insurance commissioner of the state in which the insurer is domiciled, whether an acquisition of control is effected through a tender offer, open market purchases or in any other manner, and irrespective of whether control will be direct or indirect (i.e., whether the acquisition is of an insurer or an entity that itself controls an insurer). Acquiring an insurance holding company system that includes multiple insurers domiciled in different states would require the prior approval of the insurance commissioner of each state in which each insurer within the system is domiciled.

Austria Small Flag Austria

Entities must notify the FMA, if they intend to acquire, directly or indirectly, an equity holding in an Austrian insurance or reinsurance undertaking or to further increase, directly or indirectly, such an equity holding, as a result of which the proportion of the voting rights or of the capital held would reach 20, 30 or 50 percent (Article 24(2) VAG).

In assessing the intended acquisition or increase in shares, the FMA will scrutinize the reputation of the acquirer and its proposed key personnel, its financial soundness and whether it will be able to comply with regulatory requirements. In addition, the FMA will ascertain that there is no reason to suspect any connection to money laundering or the financing of terrorism (cf. Article 26 VAG).

If the FMA is of the opinion that the influence exercised by the acquirer or holder of such qualified equity holding is likely to operate against the sound and prudent management of the undertaking, it is authorized to take the measures appropriate to put an end to such situation, including the appointment of a government commissioner (cf. Articles 27 and 284 VAG).

Foreign ownership is not restricted. However, if a foreign investor wishes to acquire an Austrian insurance undertaking, the VAG grants the FMA additional rights in the course of the authorization process, e.g. an extension of the FMA’s timeframe for requesting information from the acquisitor (cf. Article 25(3) VAG).

Chile Small Flag Chile

Yes, there are ownership restrictions. Nevertheless, these are the same for local or foreign shareholders or controllers. Shareholders and final controllers of insurance companies must evidence, among other requirements:

  1. that they: (i) have not been sentenced for felony crimes or crimes pursuant to the Insurance Act; (ii) are not subject to liquidation and inability or prohibition to perform commercial acts; and (iii) have not been sanctioned by the Insurance Regulator with the revocation of its authorisation/registration within the records it keeps pursuant to the Insurance Act or other laws, and in the case the shareholders are individuals, that they have not participated as a manager, director or legal representative of an insurance company that has been subject to these sanctions or cancellation of its incorporation authorisation, unless he/she safeguarded his/her responsibility according to applicable law or has proved that did not take part in the acts that caused it to be sanctioned;
  2. that they (i.e., all shareholders) have a net consolidated equity at least equal to their capital contribution in the relevant insurance company;
  3. submit financial statements which state that their consolidated net equity is at least equal to the capital contribution to be made to the insurance company by each of the relevant shareholders.

Furthermore, shareholders of life insurance companies must additionally:

  1. individually or jointly have a net consolidated equity equivalent to the projected investment;
  2. not have incurred in serious and reiterated behaviour that may risk the stability of the relevant insurance entity or its insureds;
  3. not have taken part of acts or negotiations, of any kind, contrary to the laws, regulations or good financial practices that operate in Chile and/or abroad;
  4. not: (i) be subject to liquidation and inability or prohibition to perform commercial acts; (ii) participated – within the last 15 years – as director, manager, chief executive or majority shareholder (directly or through third parties) of a bank, life insurance company, or pensions fund management company, that has been subject to windup, bankruptcy, or subject to provisional administration, respect of which the Chilean State or the Chilean Central Bank suffered considerable losses; (iii) register protests of documents that have not been cleared in the last 5 years; (iv) been sentenced for, among others, crimes against property or in connection with public documents, crimes against administrative probity, national security, tax and customs crimes, etc.; (v) been sentenced for felony crimes or been incapacitated to hold public office; or (vi) have been subject, directly or through legal entities, and as a result of a legal breach, to windup or provisional administration, or to the cancellation of its existence or operation authorisation, or its deregistration from the relevant registries necessary to operate or carry out public offers of securities.

Switzerland Small Flag Switzerland

Information regarding persons holding at least 10 per cent of the shares in an insurance company has to be submitted to FINMA during the authorisation process for approval. Anyone who intends to acquire a participation in an existing Swiss insurance company has to inform FINMA if such participation reaches 10, 20, 33 or 50 per cent of the share capital or the voting rights of such company. The same notification duties apply if an existing participation is reduced, Art 21 para 2 and 3 ISA. FINMA is authorised to restrict such participation if it might endanger the insurance company or the interests of the insureds, Art 21 para 4 LSA.

Peru Small Flag Peru

Regarding the restrictions, according to the current Peruvian Constitution, national and foreign investments are subject to the same conditions. Therefore, there is no prohibition for foreigners from holding shares in an insurance company.

Notwithstanding the foregoing, the General Law provides that shareholders must meet requirements of moral suitability and economic solvency, that is to say, they should not be involved in the scenarios of the impediments established in said Law. Therefore, a shareholder cannot be someone who has been convicted of felony crimes, has been expressly prohibited by their functions in public office, has been involved in insolvency proceedings, has exceed the maximum percentage of shares in two companies of the financial system of the same nature, among others.

Regarding the means of control over the owners of insurance companies, the article 50 of the General Law states that any natural or legal person who acquires shares, directly or indirectly, in the amount of one percent (1%) of the stock capital, in the course of twelve months or, who reaches a participation of three percent (3%) or more, is obliged to provide the SBS with the information requested, in order to identify its main economic activities and the structure of its assets. Moreover, the article 57 of the General Law provides that for the transfer of shares for more than ten percent (10%) of the stock capital in favor of a single person, authorization from the SBS will be required.

India Small Flag India

Any direct or indirect foreign investment in an insurer or insurance intermediary is restricted to 49% of paid up equity capital. Further, under Indian law, all insurers and insurance intermediaries are required to be Indian-owned and controlled at all times. ‘Indian control’ is defined to mean control by resident Indian citizens or Indian companies, which are owned and controlled by resident Indian citizens. The term ‘Indian ownership’ has been defined to mean more than 50% of the equity capital beneficially owned by resident Indian citizens or Indian companies, which are owned and controlled by resident Indian citizens.

Singapore Small Flag Singapore

Prior approval from the MAS is required before anyone, whether acting together with another person or otherwise, obtains an interest or holding in voting shares ≤ 5% of the total voting share in a licensed insurer incorporated in Singapore.

Prior approval is also required from MAS before anyone obtains effective control of a licensed insurer in Singapore. A person is regarded as obtaining effective control of a licensed insurer if, inter alia, that person (whether alone or together with his associates) hold ≤ 20% of the total number of issued shares or is in a position to control such voting power in the insurer. Approval from MAS may be subject to conditions, such as restricting the person's disposal or further acquisition of shares or voting power in the licensed insurer concerned.

The applicant must satisfy MAS that he is a fit and proper person, and that having regard to the likely influence of the person, the licensed insurer concerned will continue to conduct its business prudently and comply with the provisions of the IA.

Brazil Small Flag Brazil

There are restrictions on the corporate control group of insurers and reinsurers only as in terms of technical and economic-financial capacity. There is no restriction on foreign capital.

Israel Small Flag Israel

According to the Control Law the control of more than 5 per cent of a type of means of control of an insurer is conditional on receiving a permit from the Commissioner. In considering the granting of such permit, the Commissioner takes into consideration a wide variety of factors, including the financial means and business background of the entities requesting the permits, prevention of potential conflict of interest and ensuring the insurer is properly managed. In addition, the Commissioner will not grant a control permit and a permit to hold means of control unless the applicants have personal and business integrity, and professional experience and knowledge.

The definition of "means of control" includes: rights to vote in the General Assembly of the Company and power to nominate a director in the company.

There is no restriction regarding foreign investors, however the identity of the investor will be taken into consideration by the Commissioner before granting the investor a permit for holding means of control.

Belgium Small Flag Belgium

Yes, the shareholders and partners of insurance companies must be able to ensure that the undertaking has a healthy and prudent policy (Article 39 of the Supervision Act). If they fail to do so, the NBB will not grant a license. The assessment of the capacity to guarantee such a policy is based on the following criteria: (1) the reliability of the shareholders and partners, (2) the professional reliability and expertise of every person that will take the actual lead in the undertaking, (3) the financial soundness of the shareholders and partners in respect of the exercised and intended activities within the undertaking, (4) whether the undertaking will continue to comply with the prudential obligations of the Act, and (5) whether there is good cause to believe that money laundering may take place or that terrorism has been or is currently being financed.

The Insurance Act or the Supervision Act do not contain any restrictions on foreign ownership or shareholding.

France Small Flag France

Insurance/reinsurance companies are required to make a prior notification to the ACPR and obtain approval of the ACPR for direct or indirect changes in their shareholding structure, provided that the following thresholds (expressed in shareholding or voting rights) are met: 10%, 20%, 33% and 50% (intra-group transactions are subject to a light touch procedure). This requirement applies both to acquisitions and disposals of shares in an insurance/reinsurance company.

The ACPR considers the following criteria before approving the change in the shareholding:

  • the reputation of the proposed purchaser (and its group, when relevant);
  • the reputation and experience of any person who, following the proposed transaction, will be responsible for running the insurance/reinsurance business;
  • the financial strength of the proposed purchaser, in consideration of the business of the target company;
  • the ability of the company to meet and continue to meet prudential requirements, including whether the group of which it will be part possesses a structure allowing to exercise effective supervision, effective exchange of information between competent authorities and to determine the allocation of responsibilities between competent authorities;
  • the existence of reasonable grounds to suspect that a transaction or attempted money laundering is being or has been committed in connection with the proposed transaction or that the proposed acquisition could increase the risk.

The ACPR may refuse the contemplated change in shareholding or issue a conditional approval, binding upon the sellers and/or purchasers.

Note that additional requirements apply (i.e. verification with the European Commission that reciprocity conditions are met) if the new shareholder is a member of a non-EU group.

There is no prior approval or notification process in respect of changes in the shareholding of an insurance intermediary.

Canada Small Flag Canada

The federal Insurance Companies Act (ICA) and the laws of certain provinces (such as Québec) require Ministerial approval for a change of control of an insurer incorporated under the laws of that jurisdiction. The ICA identifies the factors that the Minister shall take into account in determining whether or not to approve the transaction, such as the nature and sufficiency of the financial resources of the applicant, the soundness and feasibility of their plans and the best interests of the financial system in Canada, but the criteria are neutral as to foreign ownership except for non-WTO member foreign institutions where the Minister has to be satisfied that treatment as favorable for Canadian companies exists in the relevant jurisdiction. Federally regulated Canadian insurers are also subject to additional ownership rules that limit ownership of large life insurance companies by major shareholders and impose a 35% public holding requirement on insurance companies that have equity of two billion dollars of more.

Updated: March 16, 2017