Financial Services And Markets Citation, commencement and extent 1 1 These Regulations may be cited as the Insurance and Reinsurance Undertakings (Overseas Insurance Regime, Transitional Provisions, etc.) Regulations 2024. 2 These Regulations come into force on 31st December 2024. 3 These Regulations extend to England and Wales, Scotland and Northern Ireland. Amendments to the Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014 2 In article 1(4) of the Financial Services and Markets Act 2000 (Excluded Activities and Prohibitions) Order 2014 (interpretation)— a for the definition of “global systemically important insurer” substitute— “ global systemically important insurer ” means an insurance undertaking or reinsurance undertaking which is included on the list of global systemically important insurers published by the Financial Stability Board on 18 July 2013, or on any updated version of that list or supplementary list of such undertakings published by the Financial Stability Board, and any subsidiary undertaking of any such undertaking provided that the subsidiary undertaking is also an insurance undertaking or reinsurance undertaking; ; b in the definition of “mixed financial holding company” omit “a third country insurance undertaking whose head office is located in an EEA state” in both places where it occurs; c omit the definition of “third country insurance undertaking”; d omit the definition of “third country reinsurance undertaking”. Amendment to the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 3 In regulation 11 of the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 (saving for certain financial services legislation relating to Gibraltar), in paragraph (5), omit sub-paragraph (y). Amendment to the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023 4 In the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023 , after regulation 9 (review), insert— PART 4 Overseas Insurance Regime Interpretation 10 In this Part— “ group ” has the same meaning as in the glossary of the PRA rules; “ insurance undertaking ” has the meaning given in section 417(1) of FSMA 2000 ; “ insurance group ” means a group which contains one or more insurance undertakings or reinsurance undertakings; “ overseas insurance undertaking ” means an undertaking with its head office in an overseas jurisdiction which if it was carrying on its activities in the United Kingdom would require authorisation for the regulated activity of effecting or carrying out contracts of insurance as principal under FSMA 2000; “ overseas jurisdiction ” means a country or territory outside the United Kingdom or Gibraltar; “ overseas reinsurance undertaking ” means an undertaking with its head office in an overseas jurisdiction which if it was carrying on its activities in the United Kingdom would require authorisation for the regulated activity of effecting or carrying out contracts of insurance that are limited to reinsurance contracts as principal under FSMA 2000; “ PRA rules ” means the rules made by the PRA under FSMA 2000, as they have effect from time to time; “ reinsurance undertaking ” has the meaning given in section 417(1) of FSMA 2000; “ territory ” includes the European Union and any other international organisation or authority comprising countries or territories. Designation of overseas jurisdiction 11 1 The Treasury may by regulations designate an overseas jurisdiction in relation to one or more of regulations 12, 13 or 14 (effects of the overseas insurance regime) (“ overseas insurance regulations ”). 2 The Treasury may make overseas insurance regulations only if they consider that those regulations are compatible with— a the protection of those who are, or may become, policyholders of an insurance undertaking or a reinsurance undertaking, b the safety and soundness of insurance undertakings and reinsurance undertakings, and c one or both of— i promoting effective competition in the interests of consumers in financial services and markets, or ii facilitating the international competitiveness of the economy of the United Kingdom and its growth in the medium to long term. 3 When considering whether to designate an overseas jurisdiction, the Treasury may, in addition to any other matter they consider relevant, have regard to the law and practice of that overseas jurisdiction in relation to the following— a the authorisation of undertakings effecting or carrying out contracts of insurance as principal; b the supervision of, and enforcement of prudential requirements applying to, undertakings effecting or carrying out contracts of insurance as principal, including such supervision and enforcement at insurance group level; c the holding of financial resources for the safety and soundness, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal, and for the protection of policyholders; d the assessment, and disclosure, of the financial position, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal; e the sound and prudent management, including at insurance group level, of undertakings effecting or carrying out contracts of insurance as principal, such as requirements to have in place systems for governance, internal control and risk management; f the handling and sharing of confidential information by public authorities (including any person currently or previously employed or instructed by them) supervising undertakings effecting or carrying out contracts of insurance as principal, including the sharing of information by such public authorities with other public authorities. 4 In this regulation, “ consumer ” has the meaning given by section 1G(1) of FSMA 2000 . Effect of designation: reinsurance contracts 12 1 Where regulations are in force under regulation 11 in respect of an overseas jurisdiction in relation to this regulation, the PRA must treat a reinsurance contract entered into by an insurance undertaking or reinsurance undertaking with an overseas reinsurance undertaking in that jurisdiction in the same manner as a non-overseas reinsurance contract for the purposes of the prudential regulation of the insurance undertaking or reinsurance undertaking. 2 In this regulation, “ non-overseas reinsurance contract ” means a reinsurance contract entered into by an insurance undertaking or reinsurance undertaking with an insurance undertaking or reinsurance undertaking. Effect of designation: insurance group capital requirements calculation 13 1 This regulation has effect where regulations are in force under regulation 11 in respect of an overseas jurisdiction (“the relevant overseas jurisdiction”) in relation to this regulation. 2 Where this regulation has effect and paragraph (3) does not apply, the PRA must permit an insurance group that contains an overseas insurance undertaking or overseas reinsurance undertaking in the relevant overseas jurisdiction to take account of the law of the relevant overseas jurisdiction in the areas mentioned in paragraph (4) for the purposes of calculating the insurance group’s capital requirements. 3 This paragraph applies where the PRA requires an insurance group to calculate its capital requirements on the basis exclusively of consolidated accounts (referred to as method 1 in the PRA rules). 4 The areas of law mentioned in this paragraph are— a the level of regulatory capital required to be held, and b the types of capital eligible to meet that level. Effect of designation: insurance group supervision 14 1 This regulation has effect where regulations are in force under regulation 11 in respect of an overseas jurisdiction (“the relevant overseas jurisdiction”) in relation to this regulation. 2 Where this regulation has effect and paragraph (3) applies, the PRA must rely on the prudential supervision of an insurance group by the supervisory authority in the relevant overseas jurisdiction for the purposes of prudential supervision of the insurance group. 3 This paragraph applies where— a an insurance group has an ultimate parent with its head office in the relevant overseas jurisdiction, b the sum of the balance sheet totals of all insurance undertakings and reinsurance undertakings in the insurance group is not greater than the balance sheet total of the parent undertaking less that sum, c in the view of the PRA, the insurance group is subject to prudential supervision by the supervisory authority in the relevant overseas jurisdiction in accordance with the law of that jurisdiction relating to the prudential supervision of insurance groups, and d in the view of the PRA, the PRA has entered into arrangements with that supervisory authority such that the PRA is able to comply with any restrictions on the handling and sharing of confidential information under FSMA 2000. Overseas insurance regulations: procedure 15 1 The power to make regulations under this Part is exercisable by statutory instrument. 2 A statutory instrument which contains regulations made under this Part is subject to annulment in pursuance of a resolution of either House of Parliament. 3 Regulations made under this Part may make— a incidental, supplemental, consequential, transitional, transitory or saving provision; b different provision for different purposes. Restatement of decisions 16 1 The following overseas jurisdictions are to be treated as designated under regulation 11 in relation to regulations 12, 13 and 14— a Bermuda; b each EEA State; c Switzerland. 2 The following overseas jurisdictions are to be treated as designated under regulation 11 for the purposes of regulation 13— a Australia; b Brazil; c Canada; d Japan; e Mexico; f the United States of America. 3 In relation to Bermuda’s designation pursuant to paragraph (1)(a)— a for the purposes of regulation 12, the term “ overseas reinsurance undertaking ” does not include a captive insurer, and b for the purposes of regulations 13 and 14, the term “ insurance group ” does not include an insurance group containing a captive insurer. 4 In paragraph (3), “ captive insurer ” means an undertaking (“ A ”) the purpose of which is to provide insurance cover exclusively or mainly for the risks of its parent undertaking, or of an undertaking belonging to the insurance group of which A is a member. . Amendments to the Insurance and Reinsurance Undertakings (Prudential Requirements) (Transitional Provisions and Consequential Amendments) Regulations 2024 5 1 In the Insurance and Reinsurance Undertakings (Prudential Requirements) (Transitional Provisions and Consequential Amendments) Regulations 2024 , after regulation 6 (consequential amendments to Regulation (EU) 2015/35 ), insert— Transitional provision – other approvals under the Solvency 2 Regulations 2015 7 1 This regulation applies where immediately before 31st December 2024 an insurance undertaking, a reinsurance undertaking, or an intermediate holding company, as the case may be, has an approval under a regulation of the Solvency 2 Regulations 2015 listed in the first column of the table in the Schedule (“the table”). 2 On 31st December 2024 any approval to which paragraph (1) applies, including an approval applied at the level of the group where the PRA is group supervisor in accordance with regulation 28 of the Solvency 2 Regulations 2015 , becomes a permission granted by the PRA to apply the listed PRA rule with the specified modifications to the relevant text. 3 In paragraph (1), an “ approval ” means an approval as it has effect immediately before 31st December 2024; 4 In paragraph (2)— a “ a permission granted by the PRA ” means a permission granted under section 138BA of FSMA 2000 (disapplication or modification of rules in individual cases); b “ the listed PRA rule ” means the PRA rule listed in the second column of the corresponding row of the table; c “ the specified modifications ” means the modifications set out in the fourth column of the corresponding row of the table; d “ the relevant text ” means the text set out in the third column of the corresponding row of the table; e in paragraphs (b) to (d), “ the corresponding row of the table ” means the row in which the regulation under which the approval was granted is listed in the first column. 5 The permissions are to be treated as if— a they were granted on the basis of the information supplied by the undertaking or holding company and referred to in the approval; b any requirements that applied to the approval immediately before 31st December 2024 continue to apply; c in the case of an approval under regulation 45 of the Solvency 2 Regulations 2015 (eligible own funds for an intermediate holding company), the permissions were granted to insurance or reinsurance undertakings in the group; d in the case of an approval under regulation 54 of the Solvency 2 Regulations 2015 (transitional measures on technical provisions) the following conditions do not apply— i any condition limiting the amount of an approved deduction imposed upon the undertaking in accordance with regulation 54(5) of the Solvency 2 Regulations 2015. ii any condition providing an expiry referred to in the approval, which applied immediately before 31st December 2024. e an application had been made for each of the permissions under and in compliance with all the applicable requirements of section 138BA of FSMA 2000 and the Financial Services and Markets Act 2000 (Disapplication or Modification of Financial Regulator Rules in Individual Cases) Regulations 2024 . 6 Nothing in this regulation prevents the PRA from varying or revoking a permission in accordance with section 138BA of FSMA 2000 and the Financial Services and Markets Act 2000 (Disapplication or Modification of Financial Regulator Rules in Individual Cases) Regulations 2024. . 2 The Schedule inserts the Schedule to the Insurance and Reinsurance Undertakings (Prudential Requirements) (Transitional Provisions and Consequential Amendments) Regulations 2024 (approvals under the Solvency 2 Regulations 2015). Vicky Foxcroft Jeff Smith Two of the Lords Commissioners of His Majesty’s Treasury 6th November 2024