Is authorisation or a licence required and if so how long does it take on average to obtain such permission?
Insurance & Reinsurance (3rd edition)
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.
Taking up insurance business in or from Switzerland is subject to authorisation by the FINMA (see question 1 above – also with respect to the exemption for reinsurance business from abroad or from a Swiss branch).
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.
Proposed amendments by Pre-Draft ISA (not exhaustive):
- The Pre-Draft exempts certain types of companies from supervision and thus from the authorisation requirement (ISA 2 para 2):
- Foreign state export credit insurance;
- small mutual companies with limited significance that have existed since 1993 or earlier;
- mutuals, clubs and similar entities providing certain guarantees to its members.
- In addition, certain types of companies may become exempt on application:
- Insurers with innovative business models (e.g. InsurTechs);
- smaller entities with little economic significance if special circumstances support the exemption.
An insurer or reinsurer must be authorised by the FSC to conduct the business of insurance in South Korea. Pursuant to the IBA, there are three general lines of business for which an Insurance Business License may be procured with the following sub-categories of insurance business: (1) life insurance (e.g., life insurance, pension insurance including retirement insurance and other types of insurance prescribed by Presidential Decree); (2) non-life insurance (e.g., fire, maritime, aviation, transportation, automobile, surety, reinsurance, and other types of insurance prescribed by Presidential Decree); and (3) accident and health insurance (e.g., personal injury, disease, nursing care, and other types of insurance prescribed by Presidential Decree). Also as previously noted, a reinsurer is licenced as a non-life insurer authorised to conduct the mono-line business of reinsurance.
The authorisation process is divided into two phases which involves the securing of a Preliminary Licence and the subsequent procuring of the Final Licence. A conservative estimated timeline for both the Preliminary Licence and the Final Licence is 6 to 9 months excluding the time to prepare the applications and the entity formation with procurement of facilities, personnel, information technology, etc.
All the activities of the insurance system require an enabling title, called 'operation license'. In the case of insurance intermediaries and auxiliaries, the SBS manages a registry where are established the branches of insurance in which these companies are authorized to operate.
Obtaining an operating license to provide insurance services can take between four (04) and fourteen (14) months, depending on the license requested. The given terms take into account the time to gather the requirements, their formalization to be valid in Peru and the term established for the SBS to resolve the request.
The aforementioned deadlines do not include the process of incorporation of the company, in the case of legal entities, which could take approximately two (2) months.
All insurance holdings companies, insurance group companies, insurance companies, reinsurance companies, insurance asset management companies, insurance agencies, insurance brokerages and loss adjuster agencies shall obtain insurance permits before operating their business.
An insurer shall first obtain the approval of preparation from CBIRC before starting to establishing an insurance company. Once the insurer obtains the approval, it shall prepare the documentations required by CBIRC and apply to formally operate the business. CBIRC will grant the insurance permit to the insurer should it meets all requirements of the insurance laws and regulations.
It is hard to predict how long it will take to obtain a permission. Generally speaking, it is relatively strict to establish a new insurance company. Therefore, many investors choose to enter the insurance market by merger or acquisition.
All insurers which carry out insurance activities, including reinsurance activities, in Denmark, must obtain a license by the Danish FSA as insurance or reinsurance compa-ny. Insurers established in other EEA countries may generally obtain their license through their home country regulator, whereas insurers from non-EEA countries may generally not. Accordingly, non-EEA insurers are generally required to set up an insur-ance company or establish a branch in Denmark and obtain a license to be able to carry out insurance activities in Denmark.
As a result of the new Danish Insurance Mediation Act, it is no longer enough for insur-ance intermediaries only to be recorded in a public register, as they now also must ob-tain a license from the Danish FSA, provided that they come within the new definition of insurance intermediaries. Insurance undertakings may not use insurance mediation services from non-licensed insurance intermediaries.
To obtain a license, both as insurer or insurance intermediary, a detailed application must be filed with the Danish FSA, detailing capital, financial forecasts, etc. How long it takes to obtain a license depends on the specific circumstances, but the foreseeable review process is likely to be 3-4 months.
Insurance companies need to have a license in order to underwrite insurance related to risks situated in France. Licenses are not general, but granted for specific classes of insurance activities, which are listed in article R.321-1 of the French Insurance Code.
Reinsurers also need to have a license to carry out reinsurance and related activities in France but, unlike insurers, reinsurers can write both life and non-life business.
The French insurance regulatory body, the ACPR, is responsible for reviewing applications and granting licenses. When electing whether to grant licenses, the ACPR takes the following criteria into account:
- the technical and financial resources of the company,
- the honorability, expertise and experience of the individuals responsible for the firm’s management,
- the shareholders and capital structure, and
- the Minimum Capital Requirement (MCR) and Solvency Capital Requirement (SCR) required by the Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (hereinafter “Solvency II”).
The ACPR has six months to communicate its answer to the applicant. If no answer is provided at the end of this six-month period, the license is deemed to have been granted. In the event of a refusal from the ACPR, the applicant can lodge an appeal before the French supreme administrative court (“Conseil d’Etat”) within the two months following the refusal’s notification.
Insurers based in other EU Member States can operate in France thanks to the European passporting mechanism, pursuant to the freedom of establishment and freedom of services EU regulations, which have been implemented in France.
To operate in France, insurers situated outside the European Union will usually need to obtain a general authorisation from the ACPR, as well as a special approval for a general representative to be based in France.
All insurers in Australia must obtain both an authorisation from APRA and an AFSL from ASIC in order to conduct insurance business.
On average, it takes ASIC four weeks to grant an AFSL, while APRA can require between three and 12 months to finalise an insurance authorisation. Applications must be accompanied by a fee of AUD 1,588 for ASIC and AUD 80,000 for APRA.
For intermediaries that require an AFSL from ASIC, the same timeframe and fees apply.
In order to carry on (re-)insurance business, an undertaking has to obtain authorization from BaFin pursuant to Section 8 VAG. Section 9 VAG requires an undertaking to attach a business plan to its application, disclose the purpose and structure of the business, the region in which business is to be conducted and clearly state the conditions under which the future liabilities of the undertaking are guaranteed. The operating plan has to include, inter alia, the articles of association as well as information about the classes of insurance the undertaking intends to carry on and which risks it intends to cover. Moreover, the operating plan must give evidence of the existence of own funds in the amount of the minimum guarantee fund and provide estimates for the first three financial years of commission expenses and other current operating expenses, expected premiums, the expected expenses for claims incurred and the expected liquidity situation.
If the undertaking has already obtained authorisation to carry on insurance business in another EU/EEA country, the authorisation will be valid in Germany as well as in all other EU/EEA states under the single license regime. After going through a so-called notification procedure, an undertaking may carry on insurance business outside its home country through branches or through cross-border provision of services.
As a general rule, primary insurers and reinsurers from third countries, i.e. countries that are not Member States of the EU/EEA, wishing to carry on insurance or reinsurance business in Germany need to obtain authorisation from BaFin and establish a German branch office. The requirements for the authorisation application and the establishment of a branch office are predominantly based on Sections 68 and 69 VAG. According to these provisions, the undertakings for example have to establish a branch within the country, keep available all business documents relating to the branch locally and invoice the business activities of the branch separately. An authorised representative has to be appointed for the branch office who must have his place of residence and permanent residence in Germany in order to fulfil the duties and personal requirements imposed on the management board of a company domiciled in Germany. The application for authorisation has to contain a separate business plan for the branch office and the members of the body authorised to legally represent the enterprise and of a supervisory body must be appointed at this time. The application also has to include a certificate issued by the competent authority of the country in which the company has its registered office that the undertaking can acquire rights and incur liabilities, sue and be sued at its registered office under its name, a list of the insurance branches in which the undertaking is authorised to operate and the types of risks which it actually covers and the balance sheet as well as the profit and loss account for each of the last three financial years.
According to the Control Law the agent 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 agent as an intern in order to be qualified as a licensed agent.
Any (re)insurance company that applies for an IVASS authorization must submit a number of documents the most important of which are:
1. a certified copy of the memorandum and articles of association showing the (re)insurance classes that the insurer will underwrite, keeping in mind that, in Italy, it is forbidden to set up a company whose sole object is the exclusive pursuit of insurance business abroad;
2. evidence that the memorandum and articles of association have been deposited with the Registrar of Companies and that the incorporation has taken place in accordance with the Italian Civil Code provisions or the applicable foreign laws;
3. a scheme of operations and a technical report drawn up pursuant to the IVASS’s regulations. The cìscheme shall include an organization chart listing the names of the persons charged with administration, management, internal controls and corporate governance functions as well as the names of the natural or legal persons that, directly or indirectly, are controlling the company, with an indication of the amount of each holding;
4. proof that the company has a share capital or guarantee fund, fully paid up in cash, sufficient to meet the liabilities of the intended business plan, and proof that the company possesses the minimum organization fund required by IVASS regulations n. 97/1995 or 98/1995, or both, fully paid up in cash; and
5. for foreign companies, only, proof of the appointment of a general representative, natural person or a company, that must be domiciled in Italy at the branch’s address.
If the application is incomplete or IVASS’s requests for further information are not met, authorization is usually denied. It is also refused if the share capital or guarantee fund has not been fully paid up, or the organization fund is actually and immediately available to the company.
How long does it take to be authorized depends on how complete the application file is and how satisfactory are the information therein contained. However, the authorization is considered refused if six months elapse with no IVASS response has been received by the applicant.
Engaging in the underwriting of life insurance and non-life insurance entails obtaining from the regulatory authorities a life insurance business licence and a non-life insurance business licence, respectively. The FSA endeavors to complete its review of license application procedures within 120 days after a license application reaches to the FAS (which is a standard processing period under Article 246 of the Order for the Enforcement of the Insurance Business Act). An insurers who lay out a plan for obtaining a license, however, cannot normally rely on this standard processing time, first, because it only obligates the FSA to make an effort to meet that deadline, and second, because their negotiations with the FSA begin by an exchange of drafts preceding in the formal filling of documents for the license application – in fact, it is common that no formal documents for the license application are filed before obtaining an acknowledgement from the FSA.
The conducting of insurance and reinsurance activity requires a licence issued by the KNF. The process of establishing an insurance and/or reinsurance company and the licensing procedure are regulated by the Insurance Law. The licensing procedure (i.e. the process from the moment of filing of an application to the KNF until a decision is issued by it) takes approximately from 6 to 12 months. The whole process of establishing an insurance and/or reinsurance company, the licensing procedure and final registration of the insurance and/or reinsurance company by the registry court takes approximately from 1 to 2 years.
Under the Insurance Distribution Law, agents and individuals who perform agency activities for the agent and the ancillary agent must be entered in the register of insurance agents maintained by the KNF, which is preceded by formalised examinations. This process (the examinations and registration) takes a few weeks.
Insurance brokers must obtain a licence issued by the KNF. Insurance brokers and individuals who perform brokerage activities for the broker, must be entered in the register of insurance brokers maintained by the KNF. Similarly, as in the case of agents, it is preceded by formalised examinations. This process (the examinations and licensing) takes from a few weeks to a few months.
The exercise of the business of insurers, insurance brokers and adjusters requires, in addition to complying with the conditions of access, a special authorisation for the case of insurers and an appointment for brokers and adjusters. In terms of deadlines, the new institutional supervision in Chile by the Commission for the Financial Market, which has reinforced certain supervisory objectives, has extended the deadlines, which range from 4 months to 6 months.
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 and the Circular. 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, both Mexican reinsurance companies and foreign reinsurance companies may cede risks to and take risks from Mexican insurance companies in reinsurance. In the case of foreign reinsurance companies, these 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, an application must be submitted with the CNSF. The CNSF may grant or deny such registration on a discretionary basis. The application must contain, among others, the rating granted by an authorized rating agency that complies with the minimum ratings requirements provided by the Circular.
Permission must be sought from the PRA to carry on insurance business in the UK, i.e. to effect or carry out a contract of insurance) and from the FCA to act as an insurance intermediary. In either case ‘Part 4A permission’ authorisation application must be made and the relevant Regulator must make a decision on complete application within 6 months. If permission is granted, then the firm will receive a ‘Scope of Permission’ notice which will state the regulated activities that the firm has permission to carry out, when the permission starts and any requirements or limitations that the firm may be subject to.
Authorised firms appear on a publicly searchable Financial Services Register which shows which permissions they have been granted in relation to regulated activities.
As discussed above, both brokers and TPAs require a licence to conduct or service business in the UAE. In relation to insurance companies, it is compulsory for any business wishing to conduct insurance activities (including the servicing of such activities) within the UAE to obtain a licence from the IA. In addition to a licence from the IA, TPAs and insurers dealing with medical insurance are also required to obtain an additional insurance permit from the relevant healthcare authority, depending on the emirate in which they conduct business.
As per article 8 of IA Regulation No. 15 of 2013, applications for an insurance brokerage licence will take up to 20 days from the date of submission to the IA's decision, either approving or rejecting the application.
For insurance agents, article 9(3) of the IA Regulation No. 8 of 2011, states that any registration application will be examined and assessed within fifteen days' by the IA from the date of submission.
For surveyors and loss adjusters, article 7(3) of the Board of Directors Resolution No. 6 of 2010 states that a registration application shall be examined and evaluated within thirty days.
However, in practice the actual timeframe from the submission of the initial application and approval by the IA can take between four to six months.
Belgian law prohibits: (i) underwriting by an unauthorised (re)insurer; (ii) insurance mediation/distribution in relation to prohibited underwriting; and (iii) distribution of insurance by intermediaries without FSMA registration or EU passport rights.
The primary legislative text for the authorisation and supervision by the NBB of (re)insurers is the 2016 Law. The 2016 Law applies to various categories of (re)insurance undertakings, including the Belgian branches of foreign, i.e. non-EEA, (re)insurers. Authorisation is granted on fulfilment of statutory and regulatory conditions. The insurer is authorised for specific classes of insurance.
Authorisation must be granted or refused within a period of six months from the date of receipt by the NBB of a complete application. Authorisation is published in the State Gazette.
The NBB issues the authorisation. Authorisation must be used within 12 months and without interruption for a period exceeding six months or it will be forfeited.
The NBB has released a guidance memorandum for applicants seeking authorisation as insurers. These guidelines set out a two-phase procedure for the application (preparatory and approval in principle; and formal filing). The guidelines also comment on the information for the application, for example a business plan, insurance classes, organisation and management of the company, internal supervision, audit and compliance, technical and financial questions, asset liability management, etc.
The quality of the application and the scope of activities contemplated determine the statutory and additional capital and other requirements which the NBB sets in a given case, as well as the timetable to authorisation.
Insurance intermediaries must submit an application for registration to FSMA. Provided the application is complete, registration is possible within weeks.
Licenses for insurance brokers and agents are required, and the time to obtain them depends on the licensing requirements of each state in which the broker or agent seeks a license. For example, many states’ pre-licensing educational requirements include a minimum number of hours of coursework depending upon the line of business; e.g., New York State requires at least 40 hours of coursework prior to issuing a life, accident and health insurance license.
Other issues impacting the length of time to obtain a license include the completion of background checks and obtaining prior approval of any trade name used for licensees’ businesses. In instances where a person is licensed as an insurance agent or broker in the state of their home residence, they may apply for the same types of licenses in other states without having to complete any of the pre-licensing coursework, examinations or background checks.
Many states have streamlined the application process by allowing for the submission of online applications.
Insurance companies must obtain a business licence from OJK in order to conduct business in Indonesia. OJK will issue such a licence within 20 business days after receiving a “complete” business licence application, consisting of documents required under the regulations (and at OJK’s discretion), as well as attending meetings with OJK, if required. In practice, the total process may take up to three months (if all the required documents and information are readily available).
Yes, all insurers, insurance intermediaries, Indian reinsurers, Branch Offices of Foreign Reinsurers and syndicates of reinsurers operating through service companies set up under the Lloyd’s India branch, 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.
Licences for insurance agents and brokers are required to be obtained from the OIC.
An insurance broker company may be established as a private limited company or public limited company, or a financial institution. A company must be qualified under the LIA and/or the NLIA, for example, having authorised persons and employees holding (individual) insurance broker licences of not less than the minimum number prescribed by law. Authorised persons of an insurance broker company are required to pass an examination arranged by the OIC.
An individual insurance agent and broker must be qualified under the LIA and/or the NLIA, for example, an insurance agent must not be an insurance broker and vice versa. An insurance agent and broker must also pass an examination for each type of licence, arranged by the OIC.
The timeline to obtain the licences for an insurance agent and broker cannot be estimated as it generally depends on the schedules of relevant examinations as well as the number of candidates applying for each examination.
Both insurance brokers and agents need to be qualified in accordance with the GewO, such qualifications being publicly available via the Austrian Insurance Intermediary Register. 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. In total, three examinations have to be undertaken, which deal with legal and entrepreneurial issues as well as the specifics of particular insurance sectors. The subjects of the exams to be taken by aspiring insurance brokers differ from the corresponding versions for future insurance agents.
Similarly, insurance companies must make use of qualified employees or draw on the services of brokers and agents 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 (cf. Question 6).
To carry out (re)insurance business in Ireland, a (re)insurer must either be regulated and authorised by the Central Bank or authorised by the supervisory authority in another EEA member state. An EEA direct insurer must also notify its home regulator of its intention to passport into Ireland on either a freedom of services (“FOS”) or freedom of establishment (“FOE”) basis.
There is no prescribed format to apply to the Central Bank for authorisation as an Irish (re)insurer, however the Central Bank has issued guidance on the content requirements of each application type, together with a checklist for completing and submitting the application. Applicants are required to attend an initial meeting with the Central Bank to discuss the proposed business before submitting the full application. The checklist for applications is detailed and the requirements include a comprehensive business plan together with extensive financial and actuarial information for the proposed (re)insurer. Key position holders with the proposed (re)insurer will also be subject to the Central Bank’s fitness and probity regime. The application process is an iterative one and the Central Bank will typically require additional information or clarification and may seek additional meetings with the applicant.
The Central Bank has a statutory six month time period within which to consider a fully completed application for authorisation as a (re)insurer. Once a (re)insurer is authorised by the Central Bank it is licensed to carry on insurance or reinsurance (as appropriate) activity across the EEA. At present, the Central Bank does not charge a fee for licence applications.
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.
Providing insurance services in Norway requires a licence. A distinction is made between insurers, including reinsurers, taking on the risks insured, and insurance intermediaries. There are corporate entities in Norway that offer low value non-life insurance products, as an addition to their regular business, which falls outside of the insurance mediation regulation by exemption.
Norway is not a member of the European Union, but of the European Economic Area (the "EEA") made up of the EU, Norway, Iceland and Liechtenstein forming a single market. Within the EEA there is what is known as a single passport system. This means that an insurer can be authorised to do business in one member state and then offer their insurance products and services across the region without having to be separately authorised in each country. Under this system an insurance company can provide services by offering them from its home state (within the EEA) to a customer in another EEA country (whether online or by telephone). Alternatively, it can establish a branch abroad.
A non-EU undertaking may apply for a Norwegian licence to conduct insurance activities through the establishment of a Norwegian subsidiary. Further, a licence may be restricted to a certain geographical area, a categorisation of clients or in other ways. A licence may be restricted to certain insurance classes, e.g. accident insurance, motor vehicles, liability etc.
An application is to be considered and decided by the NFSA within a period of 6 months from the date the NFSA confirmed receipt of the application provided that the application was complete. The regulator may ask for further information and the assessment period will be prolonged. However, the application must be decided conclusively within 12 months from the date of submission. In practice, it takes 6 to 8 months to obtain a licence, although this often depends on the extent of the NFSA's work load.
The activities of an insurance broker requires a licence from the NFSA, as opposed to act in the capacity as an insurance agent. An insurance agent is appointed by the insurer and acts fully under the responsibility of the insurance undertaking. Upon registration of the insurance agent in a publicly available register, the insurance agent is given the authority to mediate the insurer's products.