GFSC lowers Insurance Industry Fee for 2027, following their largest civil fine of £1.96mn.

 The GFSC has announced that it will discount insurance industry fees for 2027 by 15-20% [1].

Today, the GFSC  issued a public statement detailing the action the GFSC  have taken to fine an insurance licensee a total of £1.96mn.  This is the largest fine levied since the States of Deliberation changed the GFSC’s fining powers in 2017, in response to a MONEYVAL recommendation.   The fine takes into account the relevant factors set out in the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020.   Further details on the reasons for the fine are set out in the separate public statement issued by the GFSC.

GFSC issues its largest fine of £1.96m following a decade of AML failings and a risk of fraud cover-up. | Comsure, Jersey

The GFSC has calculated the costs associated with the case at approximately 60% of the fine income received.  About the approximately 40% of the fine income, which is in excess of the GFSC ’s enforcement costs for this case, Section 39(8) of the Enforcement Powers Law lays down that:

• “Any sums which the Commission receives in any calendar year in respect of penalties imposed under this section on persons who are licensees, former licensees or relevant officers for a particular supervisory Law shall be taken into account by the Commission in determining the fees payable to it under the provisions of section 129 or of that Law in the following calendar year or, if that is not reasonably practicable, in the subsequent calendar year.”

As the licensee is both an Insurer and an Insurance Manager licensed under two supervisory laws, the Insurance Business (Bailiwick of Guernsey) Law, 2002, and the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002,

• The GFSC  plans to consider this additional income when levying the annual fees for the insurance sector for 2027. 
• Specifically, the GFSC expects all insurance-sector firms to receive a discount of between 15% and 20% on their 2027 annual fees [2].
• Further to this, a 15% discount will also be applied to the pro-rata annual fee for any new insurance licensee authorised after 15th March 2026. 

A full application fee will be required with any new application. Still, a discount to the pro-rated annual fee otherwise due on licensing should help reduce initial costs for a new insurance entity established during 2026.

[1] An annual fee consultation for the entire industry will take place in early autumn 2026.

[2] Whilst the absolute amount of money the GFSC ringfences for discounting fees from this fine will not change, the exact discount will depend on factors such as the total number of insurance firms as at Q3 2026, their size, and other relevant details.

SOURCES –

https://www.gfsc.gg/news/insurance-industry-fee-reduction-2027

https://www.comsuregroup.com/news/gfsc-issues-its-largest-fine-of-196m-following-a-decade-of-aml-failings-and-a-fraud-cover-up-risk/