'Reasonable Security' sustained for Gibraltar-based insurersDec 8th, 2020
This Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2020 (Statutory Instrument 2020 No.1274) was made on the 12th November 2020, laid before Parliament on 16th November 2020 and comes into force on 14th December 2020.
The Explanatory Note to this SI states:
These Regulations are made in exercise of the powers conferred by regulation 12(2) of the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019. They extend by 12 months the transitional arrangements under Parts 2 and 3 of those Regulations which enable specified categories of Gibraltar-based firms to provide financial services in the United Kingdom and facilitate the access by similar types of UK-based firms to Gibraltar’s financial services market.
As a result, the risks in relation to the ‘reasonable security’ of periodical payments where a defendant’s insurer is EEA ‘passported-in’ from Gibraltar have been moved from 31st December 2020 to 31st December 2021. However, it is intended that these transitional regulations will be replaced by the Gibraltar Authorisation Regime, which is to be established under the Financial Services Bill 2019-21.
As a result, it seems that the issues raised in Young -v- Bennett and Acromas have been dealt with in relation to Gibraltar-based insurers, although we will need to obtain confirmation of this from the Financial Services Compensation Scheme once the Financial Services Bill has been enacted.
The position remains uncertain in respect of non-Gibraltar-based insurers.