Non-admitted insurance is insurance of a risk located in a jurisdiction where the insurer is not licensed or authorised. Regulators generally require insurers assuming risks in their jurisdictions to be licensed or authorised so that they can protect the interests of their residents and constituents from unfair insurance practices and guard against insurer insolvencies.
Local views on non-admitted insurance vary greatly. Countries such as Canada, Singapore and Chile permit local residents to buy insurance from any insurer they choose, even if the insurer is not locally licensed, provided regulations related to the purchase and sale of non-admitted insurance are followed.
Other countries, like Brazil, Russia, India and China, take a different view and expressly prohibit residents from purchasing insurance from a non-admitted insurer regardless of who initiates the purchase or where the parties do their business.
Lawmakers are increasingly regulating previously unregulated or loosely regulated activities. Many of the countries where insurance is required today were not part of yesterday’s programmes. The laws of these countries were less sophisticated or were non-existent, or the regulators simply took a different view of foreign insurance purchases.
Where the laws are less clear, the support and knowledge of your broker is key to ensure you comply with local insurance regulations and your internal governance requirements.
The key challenge for businesses operating globally is to review the situation regularly. Do not assume that once a local office has been told, they fully understand the requirements and processes you are looking to put in place. Dialogue must be maintained and processes checked regularly.
That said, do not look to force local operations into a global programme. There are a number of reasons why a local programme may be in your best interest.
At Griffiths & Armour we have a wealth of experience in dealing with international insurance programmes, their compliance with local laws and their structure. We would be happy to talk through your options with you and/or to review the existing solution you have in place. If you would like to discuss further, please contact us on:
Freephone: 0800 111 4330