§ Mr. McCrindleasked the Minister for Trade if he has any plans to bring unauthorised insurance companies within the ambit and control of the Insurance Companies Acts; and if he will make a statement.
§ Dr. VaughanI have no plans at present to extend the scope of the Insurance Companies Acts. It is already an offence under these Acts to carry on insurance business in the United Kingdom without authorisation. Certain provisions of the Insurance Companies Act 1974 relating to the conduct of insurance business apply to unauthorised insurance companies. I am nevertheless ready to consider representations or specific proposals for further legislation in respect of unauthorised insurance companies.
§ Mr. McCrindleasked the Minister for Trade if he has any plans to extend the control of reinsurance companies under the Insurance Companies Acts to include offshore companies; and if he will make a statement.
§ Dr. VaughanThere are no plans to extend the supervision of reinsurance companies under the Insurance Companies Acts to companies which do not carry on business within the United Kingdom.
United Kingdom insurance companies make extensive use of the capacity of overseas reinsurers, many of which are not authorised in this country. It is essential that this practice should continue in order to ensure a satisfactory spread of risk and to avoid a dangerous concentration of United Kingdom risks in the London market. It would be impracticable, however, for my Department to supervise all the overseas reinsurers with which United Kingdom companies do business.
I intend to introduce regulations next month requiring every insurance company to disclose the names of their major reinsurers. Links with the reinsurer will also have to be disclosed. As a result, it will be possible to identify any reinsurer on which an insurance company relies for a significant amount of its reinsurance protection. Further inquiries into any such arrangements, including those made with overseas reinsurers, can then be made as necessary.