For foreign investors with an eye on the Chinese insurance market, obtaining an insurance intermediary licence is a good idea. However, compared with insurance brokerage licences, insurance agency licences are difficult for foreign investors to obtain. Therefore, foreign investors that wish to acquire control over a Chinese insurer should consider either setting up a new foreign-invested insurer or acquiring an existing foreign-invested insurer.
In the event of a hard Brexit, UK insurers must obtain authorisation as third-country insurers in Sweden in order to offer their products to the Swedish market. Notably, insurers that are uncertain of whether the business which they intend to conduct constitutes insurance business in Sweden and is thus subject to authorisation can apply for a preliminary ruling from the Swedish Financial Supervisory Authority on the issue.
The account aggregator ecosystem was introduced to solve the problems of data portability in the insurance sector, among others. However, the question of whether the business model is viable will largely hinge on the successful implementation of the consent architecture envisaged under the Master Directions Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions and the terms of the contractual arrangements which are entered into with the various regulated entities.
A recent Sao Paulo State Appellate Court case concerned a carriage of goods by sea from Port Everglades (United States) to the port of Rio de Janeiro (Brazil). The court's decision sets an important precedent in recognising that subrogation cannot be used to reinstate a right that no longer applies where a rights holder fails to observe a legal requirement. Therefore, subrogated insurers assume the same rights and limitations as assureds.
During the past five years, the Chinese courts and arbitration institutions have handled major disputes relating to reinsurance contracts. These cases prompted legislation in the reinsurance sector and drew attention to the need for more careful wording in reinsurance contracts. This article provides an overview of several essential provisions in reinsurance contracts under Chinese law.
In a notable hull insurance case, the Celle Court of Appeal dismissed an action brought by an assured pleasure yacht owner who had been sailing on the Baltic Sea and ran aground. The case facts suggest that assureds are often unaware of the impact that outdated chart materials can have on hull insurance and liability cover.
The Ontario Court of Appeal recently reconfirmed that an insured's duty to cooperate with defence council appointed by its insurer is not subject to a standard of perfection. This case serves as a strong reminder that a breach of the duty to cooperate must be substantial. It shows that, in practice, without real consequences arising from an insured's conduct, there can be no substantial breach of the duty to cooperate.
A recent Alberta Court of Queen's Bench decision demonstrates that policyholders must carefully consider the interplay between an insurance policy and its endorsements. One consideration is the distinction between endorsements that provide standalone coverage and those intended only to modify an existing policy's terms. However, most important is the overarching principle that any limitations of coverage should be clearly stated.
The China Banking and Insurance Regulatory Commission was recently formally unveiled in Beijing, marking the official launch of the new regulatory authority. This merger of the former China Banking Regulatory Commission and China Insurance Regulatory Commission is the biggest reform of China's financial regulatory system in more than 15 years and marks the start of the 'one committee, one bank, two commissions' regulation framework.
The Insurance Regulatory and Development Authority recently issued the Exposure Draft on Insurance Regulatory and Development Authority of India (Conflict of Interest) Guidelines 2019, which seek to provide guidance on the conflicts of interest that arise between insurers and other insurance companies or intermediaries which have the same directors.
The China Banking and Insurance Regulatory Commission plans to abolish two of the requirements that foreign insurance brokerage companies must meet in order to conduct business in China (ie, 30 years of business operation history and $200 million worth of total assets). If this reform takes place, domestic and foreign investors are expected to have equal status when entering the Chinese insurance brokerage market.
The European Commission recently adopted new rules to help insurers invest in equity and private debt and provide long-term capital financing. As a result of the new rules, insurers will have to hold less capital for investments in equity and private debt, including in small and medium-sized enterprises. The newly adopted rules take the form of a delegated regulation, amend the EU Solvency II Directive and follow on from the mid-term review of the Capital Markets Union Action Plan.
The Insurance Supervision Act regulates the federal supervision of insurers and insurance intermediaries in Switzerland. Since its enactment in 2006, it has been subject to only selective amendments. However, developments in recent years have made partial revisions to the act necessary. Therefore, the Federal Council recently issued a consultation draft and invited interested parties to submit their comments.
The National Insurance and Bonding Commission recently amended the Sole Insurance and Bonding Rules to include the process for securing a temporary authorisation to operate as a regulated company in the insurance sector using 'technologically novel models' (ie, tools or technological media that do not exist in the market and help in the rendering of financial services). This process aims to allow start-ups to offer and test novel models without having to fully comply with the applicable legal framework.
Israel has a no-fault system for road accident compensation under the Road Accident Victims Compensation Law. According to the law, drivers must have a valid insurance policy that covers all bodily injuries. This mandatory insurance system ensures that drivers, passengers and any third parties receive compensation when injured in a road accident. Further, it provides compensation to pedestrians who have been hit and injured by an insured motor vehicle.
The Supreme Court recently ruled in a case between Reliance Life Insurance and the wife of an insured party who had died of a heart attack. Reliance had repudiated the respondent's claim due to the suppression of material facts by the insured, who had failed to provide details of a second policy with another insurer. In its decision, the Supreme Court considered the nature of the disclosure made by the insured and the validity of the ground for repudiation of the claim.
The controversial prohibition on passing on commission forbids brokers and insurers from granting or promising special remuneration to policyholders, insured persons or beneficiaries under an insurance contract. According to the legislature, the prohibition was upheld during the implementation of the EU Insurance Distribution Directive into national law over the past three years. However, whether reinsurance remains excluded from the prohibition is unclear.
The Ontario Superior Court of Justice recently concluded that insurance policies should be interpreted differently when multiple insurers are involved. This decision runs contrary to the basic rules of contractual interpretation and conflicts with well-established precedent. If followed, it could lead to commercially unreasonable results and erode the benefits of coverage available to insured parties.
The Insurance Regulatory and Development Authority recently issued the Report of the Committee on the Regulatory Sandbox in the Insurance Sector in India, which proposes to establish a sandbox environment in the insurance sector. According to the report, the sandbox will facilitate innovation in the Indian insurance sector and provide an ecosystem to foster the experimentation required to increase insurance penetration in the market and benefit policyholders. However, reservations remain.
An Ontario court recently found that a personal injury claim by a daughter against her mother was covered by homeowner's insurance. While the insurance policy contained an exclusion for claims arising from injury to "any person residing in [the] household", the court concluded that the daughter was a tenant under the policy and therefore the exclusion did not apply. This case serves as a reminder that policyholders' intentions when purchasing insurance can be critically important.