In a letter to the market published by IVASS yesterday, the Italian insurance regulator expressly clarified that the scope of application of the guidelines set out in a previous letter to the market also includes EU insurance undertakings acting in Italy under both the right of establishment and freedom of services regimes.
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In a precedent setting judgment, the Supreme Court of Appeal in Drake Flemmer & Orsmond Inc & Another v Gajjar NO  ZASCA 169 (1 December 2017) pronounced on the principles applicable in respect of assessment of contractual damages arising from breach of mandate by an attorney.
The court had to determine at what date damages against the attorneys for professional negligence should be assessed.
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Insurance Sector Team Members:
Partners: Christine Rodrigues; Ayanda Nondwana; Rachel Kelly; Clive Rumsey; SJ Thema; Lesley Morphet; Jean Ewang; Jackie Peart
The Hogan Lovells’ Corporate Insurance Newsletter for March has been published. This provides a round-up of UK, EU and international regulatory developments relevant to UK based insurance market participants. In this issue, amongst other items, we cover:
- A number of items related to Brexit, including papers from the PRA and FCA, Theresa May’s speech and a paper from Insurance Europe on the consequences of Brexit on existing contracts
- The European Commission’s paper on its financing sustainable growth action plan.
Felipe Vazquez Acedo and Guillermo Ruiz Barrilero, lawyers in our Madrid office, have written an article on the MiFID II delegated regulations on notification of qualifying holdings on the acquisition of an investment company and on authorisation requirements and their relationship to insurance and reinsurance undertakings.
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On 29 March 2018, the Treasury Commons Select Committee (the “Committee“) announced an inquiry into economic crime in the UK. The inquiry will have two strands:
- the anti-money laundering, counter-terrorist financing and sanctions regimes in relation to which the Committee is seeking evidence on, amongst other matters, the scale of sanctions violations in the UK, the current legislative and regulatory landscape, including any weaknesses in the rules and their enforcement and the effectiveness of the Treasury and its associated bodies in supporting and supervising the regimes.
- consumers and economic crime, in respect of which the Committee is seeking evidence on, amongst other matters, the scale and nature of economic crime faced by consumers, including emerging trends and the response of the Treasury and its associated bodies to economic crime consumers face.
The inquiry appears to be aimed, in particular, at the claimed use of proceeds of crime within the London property market. However, economic crime on a wider scale is also set to be examined.
In light of the introduction of the new powers under the Policing and Crime Act 2017 for the Office of Financial Sanctions Implementation (“OFSI“) which came into effect in April 2017, any findings made by the inquiry into the effectiveness of financial sanctions implementation in the UK could be interesting in potentially indicating the future approach to be taken by OFSI in relation to enforcement action. The deadline for written evidence is 8 May 2018 and we will be monitoring developments in this space.
If you have any queries regarding the implementation of financial sanctions in the UK or regarding your company’s compliance with the same, please contact a member of the Hogan Lovells team.
The proposed amendments to the regulations of the Long-term Insurance Act, 1998 and Short-term Insurance Act, 1998 are out for comment with submissions due on 23 April 2018.
It is envisaged that the proposed regulations will come into effect on 1 July 2018, which is in
line with the proposed effective date of the Insurance Act, 2017 (Insurance Act).
The Insurance Act, will repeal all the prudential sections of both the Long-term Insurance Act, 1998 (LTIA) and the Short-term Insurance Act, 1998 (STIA).
Keeping in line with the move to a risk-based solvency model for insurers, the requirement for intermediaries to have a bank guarantee of a guarantee issued by the Intermediaries Guarantee Facility (IGF) has been done away with.
Insurance Sector Team Members:
Partners: Christine Rodrigues; Ayanda Nondwana Rachel Kelly; Clive Rumsey; SJ Thema; Lesley Morphet; Jean Ewang; Jackie Peart
The Government’s proposed Civil Liability Bill has just had its first reading in Parliament. The Bill proposes a new method of calculating the discount rate and ways in which to reduce the number of whiplash claims.
The discount rate
The discount rate is the percentage used to adjust compensation awards for victims of serious personal injury. It is intended to reflect the amount a victim could earn by investing their compensation. In February last year the discount rate was – unexpectedly for many in the industry – cut from 2.5% to minus 0.75%. That effectively meant that the compensation paid out by insurers increased.
The Hogan Lovells’ Corporate Insurance Newsletter for February has been published. This provides a round-up of UK, EU and international regulatory developments relevant to UK based insurance market participants. In this issue, amongst other items, we cover:
- Regulators’ response to the delay of the application date of the Insurance Distribution Directive
- The PRA’s final response to the Treasury Select Committee report on Solvency II
After two rounds of consultation, the China Insurance Regulatory Commission (“CIRC“) released the final version of the Administrative Measures for Equity Interests in Insurance Companies (the “New Measures“) on March 7, 2018, which will take effect on April 10, 2018. The New Measures introduce a number of restrictions in relation to shareholdings in insurance companies. A single shareholder will not be permitted to make investments amounting to more than one third of the share capital of insurers, subject to certain exceptions. The cap will not, in principle, be applied retrospectively to existing shareholdings in insurers, although certain additional regulatory measures may be taken in relation to insurers where a single shareholder holds more than one third of the equity. The New Measures have a limited impact on foreign-invested insurance companies.
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In October 2017, the Treasury Committee of the House of Commons (the Committee) published its report on the Solvency II Directive and the upcoming issues generated by Brexit for the UK insurance industry. As part of its report, the Committee made a series of recommendations to the PRA, which we highlighted in our previous note in November of last year. The Committee asked the PRA to produce a report containing commentary on any substantive progress made on the recommendations by 31 March 2018.
The PRA has now published its report, parts 3 and 4 of which detail its response on the issues raised by the Committee’s report. In addition, Sam Woods, Deputy Governor of the PRA, has recently delivered a speech addressing certain elements of the PRA’s response. This note explains the key points raised by the PRA and the likely consequences for the industry. The PRA also took the opportunity to explain progress made on certain recommendations made by the Association of British Insurers, which we have not addressed in this note.
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