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Global Insurance Blog

International Insurance and Reinsurance News, Trends, and Cases

Posted in Italy, Regulatory and legislative updates

Brexit: Italian measures for UK insurers and intermediaries

Last night the Italian Government approved the law decree aimed at ensuring financial stability and market integrity in the event of hard Brexit (the “Decree”). The final version of the Decree is expected to be issued soon and will enter into force upon the publication on the Official Journal. Amendments in the final version of the Decree cannot be excluded at this stage, but significant deviations from the below are not expected as the Decree was presented and approved on the same day.

In relation to UK insurance undertakings and intermediaries, these are the main provisions of the draft version of the Decree examined by the Government yesterday:

Click here for the full Newsflash

Posted in Case reports, Market developments, Regulatory and legislative updates, South Africa

South Africa: Purpose and simple language take precedence

On 14 March 2019, the Supreme Court of Appeal (SCA) dismissed an appeal by Centriq Insurance Company Ltd (Centriq) against a ruling of the Free State High Court holding liable a financial advisor under a professional indemnity insurance policy. The SCA held that Centriq could not rely on an exclusion in the policy that was at odds with its purpose, which was to indemnify a financial advisor for breach in connection with negligent financial advice.

The financial advisor, Mr Jose Francisco Castro (the insured), had advised a widow, Mrs Marisa Vogel Oosthuizen (Oosthuizen), to invest the proceeds of her deceased husband’s policy in an amount of ZAR2 million in Sharemax Investments (Pty) Ltd (Sharemax) in a property development scheme known as “The Villa Retail Parks Holding 2”. The villa was a yet to be completed shopping complex, a fact that the insured did not draw to Oosthuizen’s attention. The development failed following a Reserve Bank investigation, which found that Sharemax was contravening the Banks Act 94 of 1990 by taking deposits illegally.

Click here to read the full newsletter.

Posted in Market developments, Regulatory and legislative updates, USA

US: A look at the impact and insurance regulatory challenges of InsurTech innovations, AI, machine learning, blockchain, and smart contracts

Hogan Lovells counsel Robert Fettman discusses the challenges and opportunities that InsurTech innovations and technologies like blockchain, distributed ledger technology (DLT), and smart contracts present to the U.S. insurance industry.

Click here to read the full interview.

Posted in Italy, Regulatory and legislative updates

Unit-linked policies: a new judgement of the Italian Supreme Court

On 5 March the Italian Supreme Court issued a new important judgment on unit-linked policies and their nature.

Unlike previous decisions rendered over the past years, in which the Supreme Court merely referred to the lower courts the task of assessing the features of the disputed policies so as to verify whether they could be considered as financial or insurance products, this time the Supreme Court set out detailed and precise guidelines.

Click here to continue reading…

Posted in Regulatory and legislative updates, Spain

Spain: Contingency measures following no-deal Brexit published –and they guarantee continuity of insurance contracts and smooth adaptation to new regime for British insurers

What is all about?

Brexit month is finally here –or is it? Interests at stake on both sides of the Channel, fearing consequences of a no-deal Brexit, may end up cristalysing in a delay and extension to Article 50 of the TEU.

Whatever the case, as things stand now, the UK is due to leave the EU on 29 March, 2019, regardless of whether there is a deal with the EU or not.

In an effort to mitigate consequences for citizens and businesses of a no-deal Brexit the Spanish Council of Ministers approved last 1 March a Royal Decree on Brexit contingency measures covering a wide range of issues –from healthcare to travel to financial services and insurance. Continue Reading

Posted in Regulatory and legislative updates, UK

UK: Corporate Insurance Newsletter – February 2019

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:

  • Latest Brexit related consultation papers and other material from the HM Treasury, PRA and FCA
  • The FCA’s final report on its review of the wholesale insurance brokers market review
  • The European Commission’s request to EIOPA for technical advice on the review of the Solvency II Directive
Posted in UK

UK: OFSI flexes its muscles in imposition of first monetary penalty for breach of financial sanctions

Executive summary:

On 21 January 2019, OFSI issued its first monetary penalty for a breach of financial sanctions, marking a significant development in the UK’s evolving sanctions enforcement landscape. OFSI’s first use of its new monetary penalty powers, introduced by the Policing and Crime Act 2017, resulted in a £5,000 penalty issued to R. Raphael & Sons plc, trading as Raphaels Bank. The bank disclosed to OFSI its dealing in funds in the amount of £200 belonging to a designated person under the Egypt (Asset-Freezing) Regulations 2011. Firms should take note of OFSI’s recent enforcement action as an increased impetus to ensure effective compliance with financial sanctions restrictions.


Monetary penalties for sanctions breaches are a familiar concept in the US and have been imposed by the Office of Foreign Assets Control (“OFAC“) for many years.

OFSI’s increased powers under the Policing and Crime Act 2017, which came into effect on 1 April 2017, were heralded at the time as a potential shift to a more ‘OFAC style’ hard line approach to financial sanctions breaches in the UK as, previously, enforcement options available to OFSI (and, prior to that, HM Treasury) had been limited to formal criminal prosecution or a public warning letter.

Under the Policing and Crime Act 2017, OFSI was granted the power to impose monetary penalties of up to £1 million or 50% of the value of the breach (whichever is greater). OFSI subsequently issued its Guidance on Monetary Penalties for Breaches of Financial Sanctions (the “Guidance“) in May 2018 which detailed how it would apply these powers and, in particular, how it would review the seriousness of the breach to determine the level of monetary penalty to impose. Please see our blog post here for more details.

On 25 February 2019, OFSI published a notice about the monetary penalty which had been issued to Raphaels Bank on 21 January 2019. Whilst the published details of the breach by Raphaels Bank are limited, it appears that it made a disclosure to OFSI in respect of its dealing with funds in the amount of £200 belonging to a person designated under the Egypt (Asset-Freezing) Regulations 2011.

A £5,000 monetary penalty was imposed by OFSI, which had been reduced from £10,000 “in consideration of Raphaels Banks’ disclosure and cooperation“. Pursuant to the Guidance, this suggests that the case in question was considered ‘serious’ by OFSI as a 50% reduction of the baseline penalty was applied to take into account the voluntary disclosure. In light of this, it is important to note that OFSI appears willing to impose sizable fines irrespective of the value of the underlying transaction even where it was voluntarily disclosed (here, an almost 2500% uplift in value), particularly as the present case was not assessed to be a ‘most serious’ case and involved the Egypt programme, a programme that is not currently considered to be of particular critical/strategic importance for the UK.

Next steps:

Whilst this action does not provide far-reaching insight into OFSI’s broader strategy towards enforcement, firms falling within OFSI’s jurisdiction should view this first monetary penalty as an opportunity to take stock of their own sanctions compliance operations. With the regulatory landscape shifting towards more aggressive enforcement, entities should ensure that they have comprehensive systems and controls in place to identify and mitigate any sanctions risks.

Relevant employees should be aware of the requirements for disclosing any breaches of sanctions legislation to OFSI as soon as practicable, as well as the potentially severe consequences of failure to disclose. In particular, the reduction in penalty in the present case shows the benefits of voluntarily disclosing as soon as possible in order to take advantage of such mitigation.

Additionally, insurance companies should satisfy themselves that any third party’s systems and controls (such as agents, brokers and introducers) are also sufficient to mitigate UK sanctions risks.

If you have any queries regarding monetary penalties for breaches of financial sanctions, please contact a member of the Hogan Lovells team.

Useful links:   

HM Treasury’s penalty notice on the Raphaels Bank case can be found here.

Posted in European Union, Market developments, Russia, UK, USA

Webinar: Sanctions: Navigating the Labyrinth

The pace of change to the global financial sanctions landscape picked up dramatically during the course of 2018. Global (re)insurers, brokers and policyholders now face an increasingly complex lattice of measures imposed by the UN, U.S., EU, UK and other countries. These measures often have different scope, jurisdictional reach and can directly conflict with one another.

Click here to read more and register for the webinar.

Posted in Regulatory and legislative updates, UK

UK: PRA proposals to Increase the Part VII Transfer Transaction Fee

On 13 February 2019, the PRA published Policy Statement (PS) 3/19, which sets out the PRA’s final policy on updating periodic fees and transaction fees for insurers. Notably PS3/19 implements a substantial increase in Part VII FSMA regulatory transaction fees. This change will come into effect on Friday 1 March 2019.

The Part VII transaction fee hike comes at an interesting time, following a period of increased popularity for Part VII transfers which are regarded as a key tool for Brexit restructuring. Part VII transfers allow UK firms to transfer parts of their business to EEA entities to ensure that they continue to benefit from passporting rights after exit day, currently on 29 March 2019. Continue Reading

Posted in Regulatory and legislative updates, UK

UK: A pretty clean bill of health for the London Wholesale Broker Market

FCA publishes its Final Report for Wholesale Insurance Broker Market Study

The FCA has published today its final Report in respect of its Market Study of the wholesale insurance broker market.

The Market Study was launched in November 2017 with a focus on evaluating the level of competition in the sector in light of how the sector is developing.  For discussion of the FCA’s Terms of Reference for the Market Study and further background, please see the previous blog post on this topic here. Continue Reading