Conditions of Membership

1.     (a) It is a condition of membership of the Group that a Member is concerned with the supervision of international insurance business and that it supervises insurance business in accordance with the standards established by the Group.

  (b) As a condition of membership of the Group, each Member—

(i) confirms its support for the objects of the Group; and

(ii) agrees to be bound by the Constitution, as from time to time amended.

2. (a) Subject to paragraph (h), a jurisdiction concerned with the supervision of international insurance business may apply for membership of the Group by submitting a written application to the Chairman.

(b) The Chairman shall refer each application received under paragraph (a) to the Evaluation Panel.

(c) The Evaluation Panel shall carry out an evaluation of each application referred to it by the Chairman for the purposes of determining whether or not the applicant satisfies the conditions of membership and shall make one of the following recommendations to the Group—

(i) that the applicant be admitted as a Member of the Group;

(ii) that the application for membership of the Group be rejected but that the applicant be invited to become an Observer; or

(iii) that the application for membership of the Group be rejected and that the applicant should not be invited to become an Observer.

(d) The recommendation of the Evaluation Panel made under paragraph (c) shall be sent to the Chairman who shall circulate it to all Members of the Group.

(e) The Group shall consider a recommendation of the Evaluation Panel made under this clause at its next meeting and—

(i) if it is satisfied that the applicant satisfies the conditions of membership may, by special resolution, admit the applicant as a Member of the Group; or

(ii) may, by ordinary resolution, reject the application.

(f) Where the Group rejects an application, it may invite the applicant to become an Observer of the Group.

(3) A jurisdiction concerned with the supervision of international insurance business, including a former Member or Observer, may be permitted to become an Observer of the Group for a period of three years if the Group is satisfied that the jurisdiction—

(i) is in agreement with the objects of the Group;

(ii) although not able to satisfy the conditions of membership, is making a genuine effort to ensure that the conditions will be satisfied whilst it is an Observer; and

(iii) intends to apply for membership of the Group whilst an Observer.

(b) An application under paragraph 2(a) shall be submitted to the Chairman.

INTERPRETATION OF MEMBERSHIP CRITERIA

1. Acceptable insurance legislation

There should be legislation in place covering the supervision of international insurance business including provisions for:

  1. licensing (or similar authorisations);
  2. intervention capabilities in cases of problematic insurers;
  3. cancellation of licences by the member state;
  4. minimum capital and solvency requirements;
  5. submission of annual returns which monitor the financial position of the insurers writing international insurance business; and
  6. Local representation.

2. Effective enforcement of pertinent law

The member will have demonstrated that problems with insurers writing international insurance business have been dealt with effectively. This could be done by providing case histories of the past problems including the imposition of sanctions and final liquidation, if applicable.

Members may be asked to provide details of cases which have received adverse press publicity and will have proved that they have been dealt with effectively.

Members with new insurance legislation and who have experienced problems not necessarily of an insurance nature will have satisfactorily demonstrated other legislation (e.g. companies law or general financial services law) has been effectively enforced.

3. Adequate resources (including properly qualified supervisory personnel) to effectively administer the supervisory and regulatory functions

The insurance supervisory department must demonstrate an adequate number of staff and a sufficient income to supervise the number of insurers licensed (or other cognate expression) in their country.

The person responsible and accountable for the overall control of the regulatory and supervisory function of insurance and reinsurance activities must be a person of undoubted integrity and have pertinent experience, training or qualifications which have formed in him/her;

  1. sufficient insurance and reinsurance knowledge, skills and soundness of judgement to carry out the function;
  2. a thorough understanding of the business being regulated and the products offered by, and product innovation of, insurance and reinsurance operation
  3. the ability to assess the assets and liabilities, state of affairs, quality of management and business practices of insurance and reinsurance operators, and the risks and dangers inherent in a portfolio of complex and sophisticated insurance and reinsurance business;
  4. the capacity to inspire the confidence of the worldwide regulatory community in order that it may be reassured that insurance and reinsurance operators in his/her territory are subject to wise, prudent and reasonable control.

Subordinate executive staff must have the experience, training or qualifications relevant to insurance and reinsurance business that befits their respective responsibilities and accountabilities.

4. The ability to exchange information with other comparable authorities to be used solely for the purpose of prudential regulation.

It shall be a condition of membership that a member shall be able to exchange information, for prudential supervisory purposes or in the interests of the public, with any Authority which appears to the member to exercise in another place functions corresponding to those of the member in one or more of the following circumstances:

  1. to enable the member or the authority with which the information exchange is sought to carry out its statutory functions;
  2. in the interests of the prevention or detection of crime;
  3. in connection with the discharge of any international obligation to which the member's country is subject;
  4. where the disclosure of the information is necessary for supervision of an insurance undertaking to be effected on a consolidated basis; and
  5. with the consent of the person to whom the information relates.