Insurers

Insurance companies must obtain a licence before beginning insurance activity. Important changes to their business and the surrender of a licence also require approval.

The insurance authorisation framework protects policyholders and supports confidence in the insurance market. SFMA reviews whether the applicant can meet its obligations under insurance contracts and whether its organisation is suitable for the classes of insurance it intends to write.

Initial licensing

An application normally includes information about the legal entity, ownership structure, classes of insurance, business plan, governance, risk management, technical provisions, solvency position, reinsurance and internal controls. The persons entrusted with direction and oversight must have the necessary professional qualifications and a good reputation.

Business plan and classes of insurance

Insurance activity is assessed by business class. The business plan sets out what risks will be insured, how premiums are calculated, which distribution channels are used and how claims will be handled. SFMA checks that the planned activity is financially sustainable and that policyholder interests are adequately protected.

Changes requiring approval

After licensing, insurers must seek approval for material changes such as new insurance classes, changes to the approved business plan, portfolio transfers or other structural adjustments. The same applies when an insurer wishes to surrender its licence or cease regulated activity.

Supervision after licensing

Licensed insurers remain subject to solvency, governance, reporting and audit requirements. SFMA may request information, require corrective measures or restrict activity if an insurer no longer satisfies the conditions attached to its licence.