Is authorisation or a licence required and if so, how long does it take on average to obtain such permission?
Insurance & Reinsurance
Undertakings cannot carry on insurance or reinsurance business in Ireland without authorisation from the Central Bank or from another recognised EU regulator through the ‘single passport’ regime.
On applying for authorisation, an applicant will typically meet with Central Bank representatives on a number of occasions. In the first instance, the applicant will have a preliminary meeting with the Authorisations Team of the Central Bank. Thereafter, the application proceeds through the submission of a detailed business plan to the Central Bank. The Central Bank will take a number of months to review the application. During the review process it will typically request additional information and documentation and is likely to have comments on certain features of the application for authorisation. The Central Bank may seek additional meetings with the applicant as part of this process in order to discuss aspects of the proposal in further detail.
The Central Bank has a statutory six month time period within which to consider a fully completed application for authorisation as an insurance undertaking. Once an undertaking is authorised by the Central Bank it is licensed to carry on insurance or reinsurance activity across the EEA.
A reinsurance provider can establish a special purpose reinsurance vehicle, which provides a quicker and simpler route to authorisation and reduces the extent of supervision by the Central Bank as compared with fully regulated reinsurers.
Before a business can undertake a regulated activity (whether underwriting or mediation of insurance) it must seek permission to be authorised. Authorised firms appear on a Financial Services Register which shows which permissions they have been granted in relation to activities.
The PRA is under a statutory duty to complete applications for Part 4A permission within 6 months (12 months where the application submitted is incomplete).
All insurers who carry out insurance activities in Sweden must be authorised by the FSA, except for EEA insurers operating on the basis of authorisations obtained in their country of domicile.
To obtain authorisation, an insurance company’s application must include detailed information about the applicant, its ownership and control, Articles of Association, organisation description, business plan, capital base, its central functions, such as actuary, compliance and risk management, as well as insurance technical guidelines regarding debt coverage, money laundering, executive pay, and investment guidelines.
The FSA deals with authorisation applications within five months of receipt. If requested, the FSA may also give an advance ruling on whether or not the particular business is subject to authorisation. Such advance ruling is binding for the FSA and may be appealed by the applicant to the administrative courts.
All insurance intermediaries, except tied insurance intermediaries, must also be authorised by the FSA. To obtain authorisation, an intermediary’s application must, inter alia, include detailed information about the legal or physical person applying for authorisation as insurance intermediary and, if applicable, its management personnel and employees. The information that shall be provided shall, inter alia, include details about financial strength and appropriateness as well as an assurance that all relevant persons have sufficient experience and knowledge for their respective positions.
Providers of intermediation activities which are not exempted from the authorisation requirements pursuant to the provisions of the German Trade Regulation Code have to obtain a license prior to the commencement of intermediation services from the competent Chamber of Industry and Commerce, see above. The licencing and registration of a German intermediary takes about four weeks.
Norwegian insurance legislation does not grant personal licenses and instead the insurance undertaking itself must be authorised. An insurance license is granted for one or more classes of insurance, as defined in the regulation on separation in insurance classes (based on Directive 73/239/EEC on direct insurance):
- Life insurance.
- Non-life insurance
- Guarantee insurance.
The Ministry of Finance grants authorizations to conduct insurance activities in Norway, with the FSAN as the preparatory body. An application must include:
- A business plan for the company's first three years of operation
- An overview of the insurances to be offered by the company.
- Details of the company's capital.
- A budget for establishment and administration expenses.
- Details of the principles to be applied for calculating premiums.
- Details for the plan regarding reinsurance arrangements.
- A forecast of financial position after three years' operation.
In practice, the FSAN requires far more detailed analyses from the applicant's side, not least with respect to solvency capital, capital adequacy, actuarial and organizational matters. The level of detail depends on the complexity of the applicant's planned product range, that is, if it will offer conventional insurance products or more complex products such as various longevity products, defined benefit products and so on.
The application must also be accompanied by particular documentation, including the company's articles of association, certified copies of the company's memorandum of association and minutes of the first general meeting.
Provided that the applicant provides all required documentation, the permission shall as a main rule be granted within 6 months.
An insurance license may be revoked in the event of certain irregularities, including irregularities relating to the company's management or if the company no longer has an adequate financial basis.
Insurance and reinsurance companies that are established in the EEA can operate in Norway on a right of establishment or freedom of services basis under the applicable EU insurance directives. Norwegian branches of such foreign companies can commence their activities two months after the FSAN has received a notification from the home state regulator of the foreign insurance company. An EEA-based insurer or reinsurer who wants to operate on a freedom of services basis can commence its activities in Norway once the company has received confirmation from its home state regulator that the latter has filed the notification of the insurer's intention of providing cross border activities in Norway with the FSAN.
Non-EEA based insurance/reinsurance companies can also establish a branch in Norway, provided that the FSAN has entered into an agreement on supervisory activities with the home state regulator of the foreign insurance company. Non-EEA based insurance/reinsurance companies must apply the Ministry of Finance for a license to conduct insurance activities, and cannot make use of a simplified notification procedure.
Pursuant to the LISF, to incorporate and operate an insurance company in Mexico, an authorization shall be filed with the CNSF. The application must comply with the requirements set out in Article 41 of the LISF. The CNSF has discretional authority to grant the authorization or to deny it.
As a general rule, the process to obtain the license to incorporate a new insurance company takes between nine and twelve months from the date of the filing of a complete application; and an additional four months to initiate operations after the respective incorporation.
Under the LISF, Mexican reinsurance companies and foreign reinsurance companies must be registered with the General Foreign Reinsurance Registry to take Reinsurance and Rebonding in the Country (“RGRE”) to cede or take risks in reinsurance from and with Mexican insurance companies. In order to register with the RGRE.
It is mandatory for those who intend to engage in any insurance related activity in the UAE (other than reinsurance) to apply for and obtain a license from the IA. There are also other regulatory steps that must be taken before the entity is fully licensed to carry on its activities, including obtaining a commercial license from the Emirate in which it is located. Those companies offering medical insurance products will also require a permit from HAAD and/or DHA, depending on if they operate in Abu Dhabi or Dubai.
In practice, the IA is not presently granting any new insurance company licenses, for the reasons discussed in Query 19 below.
With regard to brokers, as per IA Regulation No. 15 of 2013, the IA will consider the license application and make its determination within twenty working days from submission. For agents, the assessment period is fifteen days, as per IA Regulation No. 8 of 2011, and for loss adjusters and surveyors the assessment period is thirty days, as per IA Regulation No. 6 of 2010; however, the stated periods only account for the assessment of the license application and do not guarantee final approval within these timeframes.
In practice, the actual timeframes needed to obtain a license are measured in months, and will depend upon the quality of the application and whether the initial application contained all of the required elements. Because obtaining final operational authority for all of the relevant ministries and other regulators involves multiple steps that may need to be taken in serial, a delay in obtaining one document will create a delay in the processing of the entire application. An example of this can be found, infra, at Query 13. It is not uncommon for a broker or TPA license to take between 8 and 12 months, or greater, to be approved by all of the regulators to whom application must be made.
In the DIFC, approval is needed from its financial services regulator - the Dubai Financial Services Authority (DFSA) - before a license is granted. This can take from between 3 and 6 months for a broker or TPA license. A license to issue reinsurance is more complex and will likely take longer.
The time to obtain an insurance agent or broker license depends on several factors. First, the applicant must satisfy any applicable pre-licensing educational requirements (or rely on an exemption) and then pass a licensing examination. Then an applicant would need to submit a licensing application to the “home state,” the state in which the applicant resides or conducts an insurance business. Many states now allow licensing applications to be submitted electronically, thereby reducing processing time. After the person’s home state issues a license, the person may apply for a non-resident license in every other state in which such person intends to conduct an agency or brokerage business. Most states have adopted licensing reciprocity rules, allowing a person licensed in his or her home state to become licensed in another state with substantially similar licensing requirements without taking another examination or satisfying educational requirement anew. Reciprocity rules apply only with respect to the lines of authority for which such person is licensed in the home state. Thus, a person with a life agent license in the person’s home state can only obtain a life agent (or equivalent) license in other states.
Self-employed insurance brokers and agents need to be qualified in accordance with the GewO. In particular, brokers and agents need to pass a qualification examination to be permitted to market and promote insurance contracts. The timeframe for obtaining a licence depends on the individual’s prior knowledge. Preparatory courses are regularly held at the Institute for Economic Promotion of the Austrian Federal Economic Chamber (WIFI). In total, three examinations have to be undertaken, which deal with legal and entrepreneurial issues as well as the specifics of particular insurance sectors.
Similarly, insurance companies must make use of qualified employees or draw on the services of self-employed brokers when brokering insurance products to clients.
With regards to the licensing requirements for insurance and reinsurance undertakings, only insurers that have been authorised by the Financial Market Authority (Finanzmarktaufsicht; FMA) are permitted to undertake insurance business. Please revert to Question 6 for further details.
Yes. Insurance and reinsurance companies, as well as insurance and reinsurance broker and loss adjustors all require the Insurance Regulator’s prior authorisation or registration to operate, in accordance with the Insurance Act.
In the case of insurance and reinsurance companies, the Insurance Regulator’s authorisation requires the interested parties to submit specific documents to the Insurance Regulator. Applicable regulations provide that the Insurance Regulator should issue its decision within 30 days as of the date of the relevant filing. However, this period may be suspended if the Insurance Regulator requests amendments to the filing or additional information from the applicant. In this scenario, the abovementioned term required for the Insurance Regulator’s ruling will not resume until the applicant complies with the Insurance Regulator’s additional requests. Notwithstanding the foregoing, if the Insurance Regulator has not responded within 60 days as of the date of the relevant filing, the interested party may request it to issue a decision solely based on the documents submitted until that time. In such case, the Insurance Regulator shall issue such decision within 5 business days. In our experience, should no extraordinary issues arise, the relevant authorisation may take between approximately 2 to 6 months, as of the initial filing of the required documents to the Insurance Regulator.
In the case of insurance brokers, reinsurance brokers and loss adjustors, the person or legal entity interested in carrying out this activity must provide the Insurance Regulator sufficient evidence of their compliance with applicable special laws in order to be registered in the corresponding Insurance Regulator special registry.
Taking up insurance business in or from Switzerland is subject to authorisation by the FINMA (see question 1 above). In the course of the application a business plan of the insurance company must be submitted to FINMA. The business plan consists of the following information and documents:
- Organisation and local area of activity including, where applicable, the group or conglomerate of insurance companies the companies belongs to
- If activity abroad is envisaged: authorisation or equivalent by the foreign supervisory authority
- Information on capital and reserves
- Balance sheets of the last 3 business years or opening account
- Information on persons holding at least 10 per cent of the share capital in the insurance company or who can influence the company by other means
- Information (including names and CVs) on the persons who are in the senior management and those who are in charge with the supervision and control of the senior management
- Name (including CV) of the appointed actuary
- Agreements by which essential functions of the insurance company shall be outsourced
- Envisaged classes of insurance and kind of risks to be covered
- Where applicable: membership in the national insurance burau and national guarantee fund.
- Where authorisation for assistance is applied for: information on means to perform assistance benefits
- Reinsurance plan and retrocession plan for active reinsurance
- Estimated costs for the set-up of the insurance company
- Budgeted balance sheets and budgeted profit and loss accounts for the first 3 years
- Information on risk management
- In case of life insurance in connection with occupational schemes and in supplemental health insurance: Tariffs and general terms and conditions.
The duration of the licensing process depends on various issues, including the quality and completeness of the documents submitted to the FINMA, the complexity of the envisaged business, whether authorisation is sought for a newly established insurance company with its seat in Switzerland or for a branch of an EU based insurance company (the latter profit from some a certain liberalisation) communication with FINMA and, last but not least FINMA’s workload.
On average, once the documentation has been completed and lodged, one should expect that it may take between 3 and 6 months before a licence is granted.
All the activities of the insurance system require an enabling title, called 'operation license'. In the case of insurance intermediaries, the SBS manages a registry by virtue of which the services of the branches of insurance are specified for each insurance company.
Obtaining an Operating License to provide insurance services can take between 8 and 12 months.
For insurance brokers, the average term to obtain its registration before the SBS is approximately 12 months for natural persons and 04 for legal persons. For reinsurance brokers, the average term to obtain the registration is approximately 04 months.
Yes, all insurers, insurance intermediaries, Indian reinsurers, Branch Offices of Foreign Reinsurers and Syndicates of Lloyd’s India, are required to be registered in accordance with the applicable regulations issued by the IRDAI.
Broadly, for most of these entities the registration process is divided into stages. The timelines for obtaining registration are not expressly specified under the applicable regulations and therefore, vary on a case to case basis and depending on the form of entity being registered.
Insurance brokers are required to obtain an insurance broker license from the MAS, pursuant to the IA. Banks, financial advisers, direct life insurers, capital market service providers licensed under the relevant governing Acts are, however, exempted from this requirement.
Applicants may be registered as:-
- A direct insurance broker;
- A general reinsurance broker;
- A life reinsurance broker; or
- An insurance broker to carry out any combination of the above.
In order for this licence to be granted, potential applicants must also satisfy a number of criteria, including minimum financial requirements, management expertise, track record and the adequacy of internal compliance systems and processes.
All potential applicants must submit their application in a prescribed form to the MAS. MAS takes approximately 4 months to process and approve a registration application.
SUSEP authorization is required to act as an insurer or reinsurer in the Brazilian market. SUSEP makes extensive analysis of the authorization request, taking into account the capacity and suitability of the controlling group. SUSEP cannot deny the request if all legal and regulatory requirements are met. This analysis takes on average six months in ordinary circumstances. Insurance brokers must obtain a license from SUSEP, after they have passed a qualifying examination.
According to the Control Law the broker must pass examinations in order to receive a license. After passing the exams, he must work for 2 years at the office of an authorized broker in order to be qualified as a licensed broker.
With respect to (re)insurers, a licence is necessary for every insurer or reinsurer wishing to be active in Belgium, depending on its home country: (1) Belgian (re)insurers must be licensed in Belgium prior to starting their activity (Article 17 of the Supervision Act ), (2) (re)insurers from another EEA member state may be active in Belgium either through a Belgian branch or through the freedom to provide services (Articles 550 and 556 of the Supervision Act), after having passported in Belgium the licence obtained in their home EEA country, or (3) (re)insurers outside the EEA must be licensed in Belgium (Article 584 of the Supervision Act).
After the completion of a file which complies with the relevant legal provisions, the process of obtaining a licence granted by the NBB may take around 2.5 or 3 months.
With respect to (re)insurance intermediaries, Article 262 of the Insurance Act states that registration is necessary for every insurance intermediary wishing to be active in Belgium, depending on its home country: (1) Belgian insurance intermediaries must be registered on the list of insurance intermediaries kept by the FSMA prior to starting their activity, (2) (re)insurance intermediaries from another EEA member state may be active in Belgium either through a Belgian branch or through the freedom to provide services after having passported in Belgium the registration obtained in their home EEA country, or (3) (re)insurance intermediaries from third countries must be registered with the FSMA prior to starting their activities in Belgium.
The FSMA has a period of 60 days after receipt of the future (re)insurance intermediary’s complete file to decide on the registration.
French insurance and reinsurance companies must obtain a licence from the ACPR before undertaking insurance/ reinsurance business in France. The licence is delivered for specific classes of insurance activities. Unlike insurance companies, reinsurers may write both life and non-life reinsurance business.
Licence applications are submitted to the ACPR and the ACPR has an overall period of six months to decide whether it will grant the licence, from the date of receipt of the complete application. In the context of Brexit, the ACPR has announced that streamlined procedures will be put in place for the licensing of insurance companies. In the case of activities that are already supervised by the relevant authority of the home jurisdiction, the licensing procedure will be simplified and accelerated, by using documents which are already available in English. Any entity making the necessary application will be allocated an English-speaking contact to liaise with concerning all applications.
European Union (EU) and European Economic Area (EEA) insurers and reinsurers can undertake business in France through the European passporting process pursuant to the freedom of services and/ or freedom of establishment regimes set out in the EU regulations as implemented in France.
A foreign insurer needs to obtain the approval of the Federal Minister of Finance and OSFI before commencing to insure risks in Canada, a process which may take twelve months or more. After that, provincial licensing of an insurer is a matter of two to four months on average. Licensing of intermediaries is exclusively provincial and takes about two to three months on average.