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Global Insurance Blog

International Insurance and Reinsurance News, Trends, and Cases

Posted in Market developments, Regulatory and legislative updates, USA

US: NAIC Developing Best Practices for Regulatory Review of Predictive Models and Analytics in Rate Filings

As computing power grows exponentially, it has opened the actuarial modeling world to new and sophisticated forms of data collection and analysis, resulting in insurance companies seeking increased “predictiveness” of potential losses by employing ever more complex modeling methods in establishing, and justifying, premium rates.

Predictive analytics, which involve a number of techniques, including data mining, statistical modeling and machine learning, in its forecasts, allows insurers to use “big data” to more precisely forecast future events.
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Posted in Case reports, UK

UK: Sanctions exclusion clauses: What can we learn from Mamancochet Mining Limited v Aegis Managing Agency Limited and Others [2018] EWHC 2643 (Comm)?

On 12 October 2018 the High Court handed down judgment in a case that concerned a claim brought against insurers for payment under a marine cargo policy relating to the theft of steel billets from an Iranian port in late 2012. The 11 defendant underwriters sought to rely on a London standard insurance market sanctions exclusion clause included within the policy in resisting payment of the claim:

No (re)insurer shall be deemed to provide cover and no (re)insurer shall be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose that (re)insurer to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, law or regulations of the European Union, United Kingdom or United States of America“. Continue Reading

Posted in Regulatory and legislative updates, UK

UK: The FCA consults on new SM&CR guidance on statements of responsibilities and responsibilities maps

On 11 October 2018, the FCA published a guidance consultation for FCA-authorised firms on preparing statements of responsibilities and responsibilities maps under the Senior Managers and Certification Regime (SM&CR). Under the SM&CR, which will apply to all FCA authorised firms from 9 December 2019, firms will be required to prepare statements of responsibilities for each senior manager, and all enhanced firms will be required to have a responsibilities map.

While the guidance is directed at FCA-authorised firms, the FCA has indicated that it may also be useful for dual-regulated firms such as insurers and banks, which will also be required to prepare these documents.

The proposed guidance sets out the purpose of statements of responsibilities and responsibilities maps, questions for firms to ask themselves when drafting these documents and examples of good and poor practice. These examples are followed by analysis and commentary from the FCA, and provide a useful reference tool for firms preparing their statements of responsibilities and responsibilities maps. The guidance provides analysis relevant for each category of firm subject to the regime (limited, core, as well as enhanced firms). The guidance also contains example responsibilities maps for firms to consider.

The guidance is stated to be non-binding and a departure from it will not necessarily indicate a breach of the rules. Firms may apply the guidance in a risk-based and proportionate way by considering the size, nature and complexity of the firm. In a speech today, David Blunt, Head of Conduct Specialists at the FCA, indicated that the guidance has been generated following lessons learned from applying the SM&CR for banks and other firm types which are already subject to the regime. He indicated that the purpose of the examples provided is to help firms think about what should be included in these documents, but that these examples should not be slavishly or strictly followed or copied. In practice, firms should have regard to this guidance to ensure that the documents they produce take account of the FCA’s expectations.

In our experience, preparing compliant and representative responsibilities maps and statements of responsibilities documents can be a time-intensive process and is often an area of considerable uncertainty for firms seeking to comply. In the past, regulators have provided fairly limited guidance on what these documents should look like. It is therefore helpful that the FCA has decided to provide more detailed guidance in this area.

The deadline for comments on the consultation is 10 December 2018. For further detail on the proposed guidance from the FCA as well as how to respond to the consultation, please see https://www.fca.org.uk/publications/guidance-consultations/gc18-4-senior-managers-and-certification-regime-proposed-guidance-statements-responsibilities-firms

For more information on the near final rules on SM&CR released by the FCA and PRA, see https://www.hoganlovells.com/en/blogs/fision/the-fca-and-the-pra-have-released-near-final-rules-on-the-senior-managers-and-certification-regime

Please let us know if you would like to find out more about how we can help you implement the regime. We are able to offer flexible support to reflect your firm’s business needs. We can run your entire implementation project using a mix of our legal and consulting offering, provide legal advice on the key requirements and what you need to do to implement the regime, or provide template documentation to help you design and implement your own project. Let us know how we can help. 

Posted in Regulatory and legislative updates, UK

UK: Corporate Insurance Newsletter – September 2018

The Hogan Lovells’ Corporate Insurance Newsletter for September 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:

  • Publication of a speech by David Rule at the PRA about current issues in insurance supervision.
  • A new consultation paper from the PRA on implementation of the SM&CR
  • Launch of a new insurer start-up unit by the PRA and FCA
Posted in European Union, Regulatory and legislative updates, UK

Addressing Implementation: Messages from the FCA Workshop on its approach to consumers

The FCA held a workshop last week on Customers in Vulnerable Circumstances which focused on its approach to ensuring inclusive and fair treatment of vulnerable consumers in the financial services industry. Much of the focus draws from its Approach to Consumers published in July 2018 (see our previous FISion blog here).

The FCA said?

The FCA’s statistics suggest that 1 in 4 of us will experience a mental health issue at some point in our lives and half the population will suffer a mental health issue in one way of another in our lifetime. Against this backdrop, Nick Stace (Non-Executive Director, FCA) emphasised the need for firms within the industry to demonstrate that guidelines and policies relating to vulnerable consumers are implemented effectively with their impact and the outcomes measured. Christopher Woolard (Executive Director of Strategy and Competition, FCA) stressed that firms which fail to do so could face FCA intervention. There have already been significant challenges determining how to define and treat vulnerability within Financial Services but the FCA are proposing to introduce minimum standards with which firms will need to be aligned.

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Posted in Case reports, South Africa

South Africa: What’s yours is mine and what’s mine is mine

In Naidoo v Discovery Life Limited & others (202/20170) ZASCA 88 (31 May 2018) the Supreme Court of Appeal was faced with the main task of determining whether a risk-only policy with a beneficiary clause constitutes an asset in the joint-estate as envisaged by section 15(2)(c) of the Matrimonial Property Act,1984 (MPA).

This case deals with two areas of law, insurance and matrimonial law, and illustrates the interplay between the two.

The courts have previously decided on the issue of whether rights that arise by virtue of a life-insurance policy fell within the joint estate upon the death of the insured spouse. This issue was previously decided in Danielz NO V De Wet & another 2009 (6) SA 42 (C).

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Posted in Regulatory and legislative updates, UK

UK: Corporate Insurance Newsletter – August 2018

The Hogan Lovells’ Corporate Insurance Newsletter for August 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:

  • Publication by the Government of various Brexit related papers including guidance from HM Treasury on preparation for a ‘no-deal’ Brexit for financial services.
  • An update on the Law Commissions’ consultation on insurance interest
Posted in Regulatory and legislative updates, UK

UK: Corporate Insurance Newsletter – July 2018

The Hogan Lovells’ Corporate Insurance Newsletter for July 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:

  • Publication by the FCA and PRA of new policy statements and consultation papers relating to the implementation of the senior managers and certification regime
  • Publication by the Government of various Brexit related papers including draft Regulations to deal with the temporary permission regime
  • Publication of a series of policy statements from the PRA on changes to reporting formats, internal models, matching adjustment and reporting requirements.
  • Developments on ComFrame and the global insurance capital standard
  • Launch by EIOPA of thematic reviews on consumer protection issues in travel insurance and on Big Data.
Posted in Case reports, UK

“Come one, come all”: the Court of Appeal opens the floodgates and expands the scope of the jurisdictional gateways

Eurasia v Aguad [2018] EWCA Civ 1742

The Court of Appeal (“CoA“) has held that two of the “general grounds” jurisdictional gateways (as opposed to those gateways which operate only in relation to a specific type of claim) are complementary to each other, such that additional foreign defendants can be brought within English jurisdiction despite the case against those additional defendants having a merely tangential connection to England.

Read full Blog article here …

 

Posted in Italy, Regulatory and legislative updates

Italy: IVASS reviews rules on corporate governance system and outsourcing

IVASS published on 5 June Regulation no. 38 concerning provisions on the corporate governance system (the “Regulation“) implementing EIOPA Guidelines pursuant to Solvency II Directive.

The Regulation will be applicable to: (i) insurance and reinsurance undertakings having a registered office in Italy (ii) the Italian branches of insurance and reinsurance undertakings having a registered office in a third State and (iii) the Italian ultimate parent company, only with respect to the provisions concerning the group corporate governance system.
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