Insurance & Reinsurance 2019 & Reinsurance Insurance Insurance & Reinsurance 2019 Contributing editors William D Torchiana, Mark F Rosenberg and Marion Leydier © Law Business Research 2019 Publisher Tom Barnes [email protected] Subscriptions Claire Bagnall Insurance & [email protected] Senior business development managers Adam Sargent Reinsurance [email protected] Dan White [email protected] 2019 Published by Law Business Research Ltd 87 Lancaster Road London, W11 1QQ, UK Contributing editors Tel: +44 20 3780 4147 William D Torchiana, Mark F Rosenberg Fax: +44 20 7229 6910 and Marion Leydier The information provided in this publication is general and may not apply in a specific Sullivan & Cromwell LLP situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer– Lexology Getting The Deal Through is delighted to publish the twelfth edition of Insurance & client relationship. The publishers and Reinsurance, which is available in print and online at www.lexology.com/gtdt. authors accept no responsibility for any Lexology Getting The Deal Through provides international expert analysis in key areas of acts or omissions contained herein. The information provided was verified between law, practice and regulation for corporate counsel, cross-border legal practitioners, and company March and June 2019. Be advised that this directors and officers. is a developing area. Throughout this edition, and following the unique Lexology Getting The Deal Through format, the same key questions are answered by leading practitioners in each of the jurisdictions featured. © Law Business Research Ltd 2019 Our coverage this year includes new chapters on Mexico and Sweden. 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London June 2019 Reproduced with permission from Law Business Research Ltd This article was first published in July 2019 For further information please contact [email protected] www.lexology.com/gtdt 1 © Law Business Research 2019 Contents Introduction 3 Japan 84 William D Torchiana, Mark F Rosenberg and Marion Leydier Keitaro Oshimo Sullivan & Cromwell LLP Nagashima Ohno & Tsunematsu GDPR 8 Korea 90 Alessandro P Giorgetti Myung Soo Lee, Young Ho Kang and Hwang Lim Jang Studio Legale Giorgetti Yoon & Yang LLC Canada 11 Luxembourg 104 John L Walker, Sean G Sorensen, Alana V Scotchmer, Chantal Keereman and Armel Waisse Roisin Hutchinson and Albana Musta Bonn & Schmitt Walker Sorensen LLP Mexico 115 China 20 Luis Felipe García Trejo, Salvador Enrique Urbano Tejeda Elsie Shi, George Hualiang Yu, Elizabeth Lan Lan, John Bolin and Rodrigo Fernández Guerra Fletes and Celia Luan DAC Beachcroft SC Jincheng Tongda & Neal Sweden 122 Greece 32 Per Sundin, Lars Ulrichs and Sigrid Törnsten Anastasia Makri Hammarskiöld & Co Zepos & Yannopoulos Switzerland 130 India 40 Lukas Morscher and Leo Rusterholz Neeraj Tuli and Celia Jenkins Lenz & Staehelin Tuli & Co Turkey 140 Indonesia 52 Çağlar Coşkunsu and Burak Çavuş Susandarini Çavuş & Coşkunsu Law Firm Susandarini & Partners United Kingdom 148 Ireland 63 James C Scoville, Clare Swirski and Benjamin Lyon Sharon Daly, Darren Maher, April McClements and Gráinne Callanan Debevoise & Plimpton LLP Matheson United States 158 Italy 75 William D Torchiana, Mark F Rosenberg and Marion Leydier Alessandro P Giorgetti Sullivan & Cromwell LLP Studio Legale Giorgetti Zambia 170 Michael Mundashi and Chibuye Chola Mulenga Mundashi Kasonde Legal Practitioners 2 Insurance & Reinsurance 2019 © Law Business Research 2019 United Kingdom James C Scoville, Clare Swirski and Benjamin Lyon Debevoise & Plimpton LLP REGULATION The Insurance Distribution Directive ((EU) 2016/97) (IDD) amended and replaced the Insurance Mediation Directive (2002/92/EC) (IMD), Regulatory agencies entered into force on 22 February 2016 and was transposed into national 1 Identify the regulatory agencies responsible for regulating law on 1 October 2018. The IDD deals with the authorisation, passporting insurance and reinsurance companies. and general regulatory requirements for insurance and reinsurance intermediaries and distributors. It also encompasses organisational and Under the Financial Services and Markets Act 2000 (as amended) business requirements for insurance and reinsurance undertakings. (FSMA), insurance and reinsurance companies in the United Kingdom are regulated by both the Prudential Regulation Authority (PRA) and the Officers and directors Financial Conduct Authority (FCA), which are responsible for prudential 4 What are the minimum qualification requirements for officers regulation and conduct supervision of authorised firms. The PRA and and directors of insurance and reinsurance companies? the FCA are under a statutory duty to cooperate and coordinate their activities. Insurance intermediaries, such as brokers, are regulated by Officers, directors and persons who exercise senior management the FCA only. Lloyd’s of London (or the Society of Lloyd’s) is regulated by functions or ‘controlled functions’ under FSMA (eg, the director, the FCA and the PRA. Lloyd’s managing agents are also dual-regulated chief executive, actuary, or systems and controls functions) must be by the FCA and the PRA. Members’ agents and Lloyd’s brokers are regu- approved by the FCA or the PRA, or both, prior to performing such func- lated by the FCA. The Financial Services Act 2016 makes the PRA a part tions. Once approved to perform such functions, the person in question of the Bank of England. becomes subject to the Senior Insurance Managers Regime (SIMR) and accompanying Conduct Rules that impose a number of significant Formation and licensing responsibilities, including a duty to comply with regulatory require- 2 What are the requirements for formation and licensing of new ments, general principles and expectations on an ongoing basis. The insurance and reinsurance companies? SIMR, which came into force on 1 January 2016 for Solvency II firms – including UK branches of non-European Economic Area (EEA) firms, the A firm intending to conduct insurance and reinsurance business in Society of Lloyd’s and managing agents, and insurance special purpose the United Kingdom must obtain a Part 4A FSMA permission (Part 4A vehicles (ISPVs), as well as the more streamlined version of the SIMR permission) from the PRA (unless it is exempt or able to rely on the for smaller insurers falling outside the Solvency II framework, which European Union’s passporting regime). The FCA must consent to the was introduced between 1 January 2016 and 7 March 2016 – replaced PRA’s grant of permission. Insurance intermediaries must apply to the the Approved Persons Regime. The senior insurance management FCA for permission. To obtain a Part 4A permission, an applicant must functions (SIMFs) are intended to be more detailed than was the case be able to satisfy the ‘threshold conditions’ on an ongoing basis. This under the Approved Pensions Regime. The purpose of introducing the includes demonstrating that its head office is in the United Kingdom SIMFs was to ensure greater transparency about which individuals have or that it carries on business in the United Kingdom; it is adequately responsibility for which aspects of managing the business. There is a capitalised to conduct the insurance and reinsurance business in ques- new group entity senior manager function, which is intended to capture tion; and it has appropriate management systems and controls in place, anyone who exercises significant influence over the management or as well as suitably qualified and fit and proper persons capable of conduct of the affairs of the UK-regulated entity and is employed by, or performing the relevant ‘controlled functions’. is an officer of, a parent or holding company. This person, regardless of his or her physical location, will need to be approved by the relevant UK Other licences, authorisations and qualifications regulator prior to exercising significant influence over a UK-regulated 3 What licences, authorisations or qualifications are required for firm. New conduct rules apply to the new SIMR. insurance and reinsurance companies to conduct business? On 28 September 2016, the PRA published Policy Statement 27/16 ‘Strengthening accountability in banking and insurance: PRA Unless an exemption applies, prior regulatory approval must be obtained requirements on regulatory references (Part II)’. It followed Policy to carry on ‘regulated activities’ in the course of business in the United Statements 5/16, ‘Strengthening accountability in banking and insur- Kingdom. ‘Regulated activities’