Gibraltar Protected Cell Companies To Be Permitted To Write Third Party Insurance Business

Historically, 'cell companies' under the statutory regime for Protected Cell Companies have been used primarily for first party (captive-type) business. HM Government of Gibraltar has recently announced the expansion of insurance business permitted within Gibraltar PCCs (Press Release No: 486/2017, see link below), following lobbying on behalf of the insurance sector.

My view is that Gibraltar is correct in looking to extend the use of PCCs to cover third party business with the prior approval of the GFSC (local regulator). There are a number of safeguards one could put in place to permit this.

First, a cell writing open market business could have reinsurance supporting it with a minimum permitted rating or be fully collateralised. The reinsurer(s) would therefore have to be well rated with a minimum permitted rating or for an unrated reinsurer the reinsurance would be collateralised at a minimum level. The point here is obvious – if a cell's reinsurance is