The FSMA recently released a short Q&A summarising the key steps and requirements of the process for a registration application as an insurance intermediary in Belgium. This document, drafted in English, is intended to attract and inform potential newcomers, be them established insurance professionals fleeing the potential consequences of Brexit or new market entrants such as InsurTech companies.
This provides us with an opportunity to put our two-cents on the application process.
Availability of Belgian supervisors
In our experience, registration applicants often praise the availability and responsiveness of Belgian supervisors. Their availability is confirmed in the FSMA’s Q&A, which states that “The FSMA is open to meet all firms with an international business activity, that intend to register as insurance intermediaries in Belgium.”
The FSMA reminds however that it does not provide any legal advice and recommends the assistance of specialised legal counsels.
In Belgium, insurance intermediaries may choose amongst three (non-cumulative) sorts of registrations:
- Broker, which must meet certain independence standards and cannot be bound in the choice of products he or she recommends to his or her clients,
- Agent, which acts in the name and for the account of one or more insurance companies (i.e. on a non-independent basis),
- Subagent, which operates under the supervision of a broker or an agent established in Belgium.
Each registration comes with its advantages and pitfalls, and applicants are thus recommended to carefully define and structure their business to select the most appropriate registration.
No specific minimum capital requirements
The Belgian insurance legislation does not provide for any specific minimum capital requirements, though limited capital requirements may apply depending on the corporate form selected by the applicant, e.g. private limited liability company (SPRL/BVBA) must have a minimum capital of EUR 18,550.
AML and rules of conduct
Insurance intermediaries must comply with AML regulations and a series of rules of conduct which are currently inspired by MiFID I and should be updated to be in line with the IDD in the coming months.
It is to be noted that, on the basis of the transposition pre-draft laws currently available, we can reasonably anticipate that the Belgian Government will implement the IDD with its fair share of gold-plating, drawing some inspiration from MiFID II in order to establish a level playing field between investment and insurance service providers.
Professional liability insurance
All intermediaries are expected to take out a professional liability insurance upon registration. Such insurance must cover the entire E.E.A. and should provide for a minimum cover of EUR 1M per claim (indexed) and EUR 3M per year (indexed).
Assessment of key persons
Key persons in the intermediary’s structure will need to undertake a few formalities.
In a nutshell:
- Shareholders must fill out a suitability questionnaire,
- Senior Managers and the persons responsible for the distribution must fill out a suitability questionnaire and prove their qualifications, experience, and good standing,
- AML officers must fill out a questionnaire pertaining to AML legislation,
- Client-facing staff are not expected to demonstrate their professional knowledge or fill out any questionnaire.
In terms of education, the Senior Managers and the persons responsible for the distribution are only required to have a secondary school certificate granting them access to higher education. The persons responsible for the distribution may also need to have some practical experience, which can be up to 2 years, depending on their level of education and whether they act for a subagent, agent, or broker.
Passporting: the easy way to the EU market
Once registered in Belgium, insurance intermediaries can easily access the whole European market via passporting. This straightforward formality essentially requires a prior notification to the FSMA, which will in turn notify the relevant local supervisors. As the capital of Europe, Brussels represents a place of choice for European service providers and has already attracted quite a few key players on the insurance market.
However, it should be noted that subagents may only collaborate with insurance brokers and agents which are established in Belgium and are subject to the supervision of the FSMA. The registration of subagents is therefore not recommended for independent businesses willing to expand and acquire their own market share.
Though the FSMA tends to be available for face-to-face meetings, the application process can easily be carried out online.
Before starting the registration process, applicants should at least gather the following documentation:
- the Belgian company number of their firm (BCE/KBO)
- a professional email address
- a digital secure sign-on certificate (i.e. eID-card, Isabel or Globalsign Personal 3)
- all questionnaires duly completed
- means of payment
Assistance of a third party
The online application system supports powers of attorneys. Therefore, a specialised third party such as a Belgian attorney can carry out the application.
Registration and yearly fee
The online process is subject to a registration fee of EUR 658 for the year 2018.
After that, a yearly fee ranging from EUR 600 to EUR 700 is due by all insurance intermediaries.