Licensed for Reinsurance Only
The terminology “licensed for insurance only” denotes that a particular company is an accredited or admitted insurer to inscribe re-insurance on risks in a certain state.
Beforehand, this article initially defines what a re-insurer purports in order for readers to fully comprehend what is being featured in this article. To start with, re-insurer is defined as the lawful person officially authorized in accord with the law by the “Insurance Supervisory Commission” or by any competent authority, of which brings out completely re-insurance activities or operations in relation thereto. While re-insurance is defined as the procedure in covering certain risk being assigned by a re-insurer or insurer
In some events when a foreign person, re-insurer or insurer guarantee insurance or offer capacity to guarantee insurance in one’s jurisdiction, the approach to which an alien re-insurer or insurer can guarantee insurance will depend into whether the relevant re-insurer or insurer is situated and licensed to an “EU/EEA component state. If and when the re-insurer or insurer is situated in an “EU/EEA component state, then it can guarantee re-insurance and insurance under a cross border basis and basing on the underlying principle of freedom in providing services and/or establishing agencies and branches based on the liberty of establishment.
In both circumstances, the re-insurer or insurer can hold out its business upon relying on the re-insurance or insurance license approved by the member state mandate of which is identified by the Insurance supervisory commission, given that the pass porting process is therefore fulfilled. The pass porting procedure represents basically a notification of both the member state and the “Insurance Supervisory Commission” being carried out upon the request of the re-insurer or insurer, concerning the classes and activities of insurance that such re-insurer or insurer have set to perform.
Moreover, re-insurers or insurers from a non-member state can carry out re-insurance or insurance operations only through subsidiaries and branches being set up.
Such subsidiaries and branches should be lawfully authorized by the “Insurance Supervisory Commission” so as to hold out the projected re-insurance or insurance activities. Hence, re-insurers and insurers should be regulated in one’s jurisdiction and supervised by the “Insurance Supervisory Commission”. For this reason, foreign re-insurers and insurers are required to be registered or licensed to sell and underwrite insurance as well as to offer capacity in a certain jurisdiction. The underlying prospect in relying on the re-insurance or insurance license being granted by its member state, for without having to be registered and licensed by such authority would depend on whether the re-insurer or insurer is registered or not in a member state.
At length, re-insurers or insurers from member states should be registered and licensed in order to have the capacity to sell and underwrite insurance based on the underlying principle on freedom to offer services. Re-insurers or insurers from non-member states can carry out their occupation all through subsidiaries and local branches which should also be registered and licensed with the “Insurance Supervisory Commission”.