ASK MAT – as a GIMB business, am I required to be licenced by the JFSC under the Proceeds of Crime Law

I am a GIMB business in Jersey and sell home and contents insurance or annually renewable motor vehicle insurance.

As a GIMB, I was under the impression that my firm's activities and operations were outside.

• The Second Schedule (Schedule 2)
• Of the Proceeds of Crime (Jersey) Law 1999 (Proceeds of Crime Law [POCL]).

However, I have just been told by a regulatory consultant that the JFSC regulates me because the Proceeds of Crime Law covers insurance intermediaries (agents and brokers) who place insurance.

More specifically, they referred me to the POCL SCH2 [15] Underwriting and placement of life assurance and insurance:-

1. Underwriting and placement of:-

1. Life insurance and
2. Other investment-related insurance.

This applies both to:

• Insurance undertakings and
• Insurance intermediaries (agents and brokers).

(2) Sub-paragraph (1) includes –

1. Long-term business within the meaning given under Article 1(1) of the Insurance Business (Jersey) Law 1996; and
2. Investment business within the meaning given by Article 2(2)(a) and (b) of the Financial Services (Jersey) Law 1998.

MAT SAYS - CONCERNING THE ABOVE

• In Jersey, GIMB is not a financial services business under paragraph 4(b) of Schedule 2 to the Proceeds of Crime (Jersey) Law 1999 [*further notes below].
• The FATF Standards (and the JFSC AGREE) are clear that the activity or operation of underwriting and placement of life assurance and insurance and other investment-related insurance applies to both.
• Insurance undertakings and
• Insurance intermediaries (agents and brokers).
• However, this does not apply to GENERAL INSURANCE UNDERTAKINGS, agents, or brokers who:-
• Are NOT involved in the underwriting and placement of
• Life assurance and insurance and
• Other investment-related insurance.
• For example, undertakings, agents, or brokers involved solely in the underwriting and placement of annually renewable INSURANCE (such as listed below) would NOT BE captured by paragraph 15 of POCA
• HOME INSURANCE
• CONTENTS INSURANCE, OR
• MOTOR VEHICLE INSURANCE

OTHER POINTS*

• In Jersey, GIMB is not a financial services business under paragraph 4(b) of Schedule 2 to the Proceeds of Crime (Jersey) Law 1999.
• Therefore, any person only carrying on GIMB is consequently NOT within the scope of the MONEY LAUNDERING (JERSEY) ORDER 2008 [MLJO].
• The MLJO requires firms to have policies and procedures to prevent and detect money laundering and terrorist financing.
• However, GIMBs need to consider the JFSC rule books [codes of practice] that outline the JFSC conduct of business and prudential requirements:-
• GIMB-CODE - General Insurance Mediation Business Code of Practice - 1 January 2021 –
• https://www.jerseyfsc.org/media/4058/cop-general-insurance-mediation-business-code-of-practice.pdf
• Please also remember that as a GIMB, you must consider SANCTION RISKS because, in Jersey, GIMB activity is covered by:-
• The Sanctions and Asset-Freezing (Jersey) Law 2019 (SAFL) and
• The Sanctions and Asset-Freezing (Implementation of External Sanctions) (Jersey) Order 2021 (SAFO)
• When caught by SAFO/SAFL, the JFSC expects you, through the GIMB codes of practice requirement, to guard against involvement in financial crime, although this requirement is implicit, not explicit.

SOURCE

• https://www.jerseyfsc.org/media/6448/guidelines-on-interpretation-of-article-36.pdf
• https://www.comsuregroup.com/news/i-am-an-insurance-broker-eg-gimb-why-do-i-need-to-sanction-screen-my-customers/
• https://www.comsuregroup.com/news/overview-of-general-insurance-mediation-business-and-aml/