Where am I? > > Late last year, the Qatar Financial Centre Regulatory Authority (QFCA) issued new business regulation for captive insurance and insurance mediation. Akshay Randeva, director strategic development QFC, explains what they mean for insurers.
Late last year, the Qatar Financial Centre Regulatory Authority (QFCA) issued new business regulation for captive insurance and insurance mediation. Akshay Randeva, director strategic development QFC, explains what they mean for insurers.
August, 2013
 

Akshay Randeva/director strategic development, QFC

QFCRA released the Captive Insurance Business Rules 2011 (‘CAPI’) and Insurance Mediation Business Rules 2011 (‘IMEB’) on 1st July 2011 in order to support QFC’s strategy to develop Qatar as a captive insurance hub within the GCC. Prior to this, regulations for captive insurance, captive managers and other insurance intermediaries were covered in the Prudential Insurance Rulebook (amended to Insurance Business Rules 2011 (PINS) on 1st July 2011).

QFC’s Captive Hub Strategy forms a part of its plan to create three ‘hubs’in Qatar, which the QFCA announced in 2010. The other two are for Asset Management and Reinsurance.

The regulatory developments are part of QFC’s effort to provide a world-class regulatory environment which meets the standards of other recognised and long-established international jurisdictions. Captive insurance was chosen as a sector with significant potential and little competition in the region.

Drafting separate captive insurance (CAPI) and insurance mediation (IMEB) rulebooks is intended to simplify/clarify the regulatory framework and achieve a number of objectives.

First is to develop a regulatory framework more suited to the specialised demands of the captive insurance industry. Second is to encourage and support the development of the local and regional captive insurance market – and more broadly the risk management industry. Third is to stipulate a use of riskbased model for solvency requirements and the setting up of new minimum capital requirements, as well as a more comprehensive classification of captive classes.

About the Insurance Mediation Business Rules 2011 (IMEB) IMEB rules are applicable to captive managers and other insurance intermediaries intending to do business in and from the QFC.

They aim to re-classify activities conducted by insurance intermediaries and captive managers along lines that more clearly differentiate these activities in terms of their risk profile. Specific provisions have been made to:  Differentiate insurance mediation and captive insurance management.

 Simplify capital requirements based on two simultaneous tests – minimum paid up share capital and minimum net asset test.

 Amend a number of client money requirements in relation to insurance business, aimed at strengthening client money protections.

QFC believes it now offers a very competitive environment for companies looking to domicile in the region.

About the Captive Insurance Business Rules 2011 (CAPI) CAPI rules are applicable to captive parents intending to establish captive insurance business in QFC. A new class of insurance captive has been introduced – ‘class 4’, which includes any other captive insurance structure as determined by QFCA on a case-by-case basis. Class 4 is designed to allow innovative or unique structures to be developed that don’t meet the strict definitions of captive classes 1-3.

The rules specify a minimum capital requirement for captives, reflecting a generally lower risk profile of captive insurers, the introduction of letters of credit as eligible capital (provided certain conditions are met) and broader categories of captive insurers to establish protected cell companies. They also incorporate changes to allow foreign captive insurers to re-domicile to the QFC environment if appropriate standards and requirements are successfully met.

 
Share this page
 
 
Niche Publications
Digital Editions
Advertisement
Advertisement

 
News & Deals | Legal Clinic | Interviews | Market Update | Risk Management | Events | Contact
© 2024 ta’ameen Qatar, All rights reserved