Consultation Paper on Rules for Retail General Insurers

Closed 1 Jun 2023

Opened 21 Mar 2023

Results updated 15 Feb 2024

In March 2023 the Commission consulted on proposed amendments to the rules affecting retail general insurers – that is insurers with retail customers as their policyholders.  The Commission proposed changes in a number of areas including governance, disclosure of information and minimum capital requirements.

The feedback paper summarises the responses to the consultation and the revised rules. The Commission received significant feedback from the industry with 19 responses in total, all from interested stakeholders. As a result, the Commission has made a number of changes to its proposals, however, many of the proposals received broad support and the majority remain unchanged from the original CP. 

Retail insurers have become an increasingly significant part of the insurance sector in Guernsey.  They place different demands on the industry – the managers and intermediaries with which they operate and on the Commission itself as regulator – compared to other types of insurers.

The revisions published below ensure that our rules are up to date and appropriate for the Bailiwick and meet our obligations under international standards. In many cases the rules codify best practice in the industry. The rules now apply increased capital requirements, tougher governance arrangements and stricter requirements for the independence of non-executive directors for “RGIs” whose policyholders are ordinary retail customers.

In addition, as noted in the CP and Feedback paper, the Commission is proposing to make changes to the Licence fees charged to Retail General Insurers and the proposals consulted on here will be included in the Commission’s regular fees consultation paper in due course.



Purpose of the Consultation Paper

With a small life sector, the greater part of the insurance sector in Guernsey comprises retail and wholesale general (re) insurers. Whilst wholesale general (re) insurers (such as captives and Insurance-Linked Securities) make up the bulk of Guernsey (re) insurers, this paper is concerned with the smaller retail general sector. In the past, this sector has consisted of mainly domestic insurers with a small number of insurers writing business outside of Guernsey. However, recent years have seen a modest growth in the latter; and the Bailiwick wishes to see this growth continue.

The Commission’s rules generally do not differentiate between retail and wholesale general (re) insurers. However, recent experience with several retail general insurers have drawn the Commission’s attention to areas where rules need to be expanded or made more specific to address the risks presented by retail insurance. These changes will enable the industry in Guernsey to grow safely and to provide insurance services to policyholders who otherwise might find such services difficult to access. 

Most retail general insurers in Guernsey use the services of an insurance manager. Insurance managers have historically serviced the captive insurance market and may not have relevant expertise for retail general insurance. Nevertheless, such insurance managers have a key role to play in the expansion of this sector and would benefit from a more bespoke regulatory approach. The Commission is therefore proposing to add requirements to the Insurance Managers Rules in respect of managers who service retail general insurers.

The rules will be issued principally under Insurance Business Law for insurers. There will also be some amendments to the Insurance Managers Rules. If appropriate, concrete proposals on fees will be the subject of the separate annual consultation process.

This paper contains proposals relating to retail general insurers only. Arguably, some of these proposals may have equal validity for other insurance sectors – for example life. However, the recent experience of the Commission suggests that additional consumer protection is needed primarily in the retail general sector. Almost all retail general insurers in Guernsey are local legal entities. A branch should agree with the Commission the application of these rules.        

Executive Summary

The following changes for retail general insurers are proposed (as set out in the paper below):


  • If there is any doubt, an insurer must class itself as a retail rather than a wholesale general insurer.


  • All board members to be present in the Bailiwick for at least one board meeting a year; though not necessarily at the same time.

  • The board must include two Non-Executive Independent Directors (INEDs) rather than one.

  • A former employee of the insurance manager cannot become an INED for an insurer managed by that insurance manager for at least three years after leaving that insurance manager.

  • The independence of the INED to be reviewed annually after 9 years.

  • There should be an annual internal audit of a retail general insurer.

  • The board must ensure that the external auditor has the right skills to audit a retail general insurer.


  • Capital floor to rise from £100,000 to £250,000.

  • Capital floor to apply to PCC cells.

  • Prescribed Capital Ratio requirement to increase from the current minimum of 105% to 135%.

  • Removal of Own Risk Solvency Assessment exemptions.  

  • Regulatory Solvency Reporting to increase from yearly to half-yearly.

  • Minimum re-insurance requirements to be applied.

  • Differentiated fees for retail general insurers.

Systems and controls

  • A retail general insurer should have a legal opinion that it can sell into the UK if it does this.

  • Stronger controls over third party funds.

  • More specific public disclosure requirements.

  • Complaints to be considered by boards at least semi-annually.

  • Bespoke regulatory reporting requirements.


  • Insurance Managers to ensure they have the skills necessary to service retail general insurers, to the extent they develop this line of business.

  • Minimum capital requirement of insurance managers servicing retail general insurers to increase from £25,000 to £100,000.


  • Financial Services Business
  • Insurance Managers