Insurance Business (Amendment No. 6) (Jersey) Law 200-.

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A decision made (21/09/2007) regarding: Insurance Business (Amendment No. 6) (Jersey) Law 200-.

Decision Reference: MD-E-2007-0182
Decision Summary Title:	Insurance Business (Amendment No. 6) (Jersey) Law 200-		Date of Decision Summary:	20 September 2007
Decision Summary Author:	James Mews, Finance Industry Development Executive		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Insurance Business (Amendment No.6) (Jersey) Law 200-		Date of Written Report:	20 September 2007
Written Report Author:	James Mews, Finance Industry Development Executive		Written Report: Public or Exempt?	Public
Subject: Approval of the Insurance Business (Amendment No.6) (Jersey) Law 200- (the “Amendment”)
Decision(s): The Minister approved the Amendment, signed the Statement of Compatibility with the ECHR, and approved the Report to be included in the Amendment, and requested officers to take such steps as necessary to lodge the Amendment for debate by the States on 6 November 2007.
Reason(s) for Decision: The changes proposed are to introduce standard regulatory provisions: To implement international standards in the regulation of insurance business in Jersey – in preparation for the IMF assessment in 2008. To improve compatibility with the European Convention on Human Rights To enhance the ability of the Commission to co-operate with supervising authorities in countries and territories outside Jersey. The proposals have been subject to consultation and no objections have been received from Jersey Finance Limited.
Resource Implications: No measurable cost or manpower implications arise for the Commission, the States or industry.
Action required: The Finance Industry Development Executive to undertake the necessary arrangements for the lodging of the Amendment and accompanying Report au Greffe by 24th September 2007 in order for the draft Law to be debated on 6th November 2007.
Signature:		Position: Minster for Economic Development
Date Signed:		Date of Decision:

Insurance Business (Amendment No. 6) (Jersey) Law 200-.

MD-E-2007-0182

MINISTER FOR ECONOMIC DEVELOPMENT

INSURANCE BUSINESS (AMENDMENT NO. 6) (JERSEY) LAW 200-

(“THE AMENDMENT”)

JERSEY FINANCIAL SERVICES COMMISSION (“THE COMMISSION”)

ISSUE AND RECOMMENDATION
1. The Commission requests amending the Insurance Business (Jersey) Law 1996 (“the Law”) in order to –
  - implement international standards concerning the regulation of insurance businesses in Jersey in preparation for the IMF assessment in 2008;
  - to improve compatibility with the European Convention on Human Rights (“ECHR”);
  - make other minor changes.

If this Amendment becomes Law there will be a further Order to be made to add in some of the detail concerning the appointment of a manager.

It is recommended that the Minister for Economic Development approves the Amendment, signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for the Amendment to be lodged au Greffe by 24th September 2007, in order that it is debated by the States on 6th November 2007.

BACKGROUND
1. The proposals cover matters that were identified during a self-assessment exercise, undertaken by the Commission, against the October 2003 Core Principles and Methodology issued by the International Association of Insurance Supervisors. This is the methodology that will be used during the IMF assessment in 2008. These changes have been the subject of a consultation process.
1. The limited time available to draft the law precluded consultation being conducted on the draft legislation for the usual length of time and consultation had to be carried out during the holiday season of August. In order to ameliorate the limitations, a Position Paper was published in June 2007, which described in some detail the nature of the proposed changes and the reasons for them. A series of seminars was then held for the finance industry at which the proposals were again described and discussion and comment was invited.
1. Neither the Position Paper nor the discussions elicited any adverse comment on the proposals. Only three submissions were received as a result of the consultation paper, all of them from banks: in general, the comments on the draft legislation were supportive, and none was adverse.

THE PROPOSALS
1. In summary, the changes will:
  1. Establish a power for the Commission to appoint an independent manager to manage part or all of the affairs of a registered person in prescribed circumstances;
  1. Expand the power for the Commission to issue directions in a broader range of circumstances;
  1. Expand the criteria for refusing an application for registration, or revoking a registration, to include offences by the registered person, or by an employee or associate, under any of a range of legislation, whether the offences occur in Jersey or elsewhere.
  1. Require a registered person to publicise not merely the fact that it is registered but also such conditions attaching to a registration as the Commission may specify (typically any that limit the scope of its activities).
  1. Extend the provisions that currently apply to the acceptability of directors, shareholder controllers, etc., so as to apply also to other Key Persons such as compliance officers: to date, such persons have been subject to limited regulation on a voluntary basis.
  1. Introduce a right of appeal against decisions of the Commission to issue public statements. This requires provisions such as a requirement for persons to be named in a public statement to be given notice of it, although the Commission will have the authority to decide to issue without prior notice where there is an over-riding need to protect the public or the Island’s reputation.
  1. Revise the rights of appeal against other decisions of the Commission to remove the inhibit against appeals being made to courts other than the Inferior Number of the Royal Court (e.g. to the Court of Appeal); and to add a right of appeal when the Royal Court makes certain ex parte decisions on the application of the Commission.
  1. Make other minor changes, including a re-statement of provisions associated with appeals (e.g. requirements for notices of decisions) to update and improve; and a revision of the definition of “relevant supervisory authority” to ensure consistency across all laws in enabling the Commission to co-operate with such bodies in other countries and territories.
1. All of these changes affect areas of Jersey law that are likely to be subject to particular scrutiny during the forthcoming IMF assessment. If these changes are not made, criticism is likely to be made by the assessment team.
1. No measurable cost or manpower implications arise for the Commission, the States or industry.
1. The Law Officer’s Department has advised that the Minister may provide the required statement under Article 16(1) of the Human Rights (Jersey) Law 2000.

RECOMMENDATION
1. It is recommended that the Minister for Economic Development approves the Amendment, signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for this to be lodged au Greffe by 24th September 2007, in order that it is debated by the States on 6th November 2007.

JAMES MEWS

Finance Industry Development Executive