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IOM Appoints Former Chief Minister To Pensions Authority

by Jason Gorringe,, London

29 November 2002

The November sitting of the Isle of Man Parliament, Tynwald, has approved the appointment of Donald Gelling, the Island's former Chief Minister, as Chairman of the Insurance and Pensions Authority.

Between 1989 and 1996 Mr Gelling, who succeeds the late Norman Radcliffe, was the Island's Treasury Minister and was also Chairman of the Financial Supervision Commission.

The Insurance & Pensions Authority is the regulator of insurance and pensions business on the Island. In this role it seeks to ensure that insurance companies based on the Isle of Man adhere to the highest standards, protecting the reputation of the Island and giving their clients confidence that they are transacting business in a high quality, secure and well regulated centre, which has the expertise and capacity to cater for their needs both now and in the future.

In the last two years, the Authority has been carrying out a thorough-going review of the IOM's pensions legislation, aiming to create an international framework for offshore pension schemes.

Last summer, the Authority's Marketing Executive, Mike Lightfoot, toured extensively giving presentations to pension providers. Says Mike: "In the past the Island has been hugely successful within the expatriate pension market, largely through our highly innovative life insurance industry. However, as businesses expand globally it is becoming clear that we are moving away from mere expatriation. Many of us are now actively pursuing international careers, by undertaking a variety of contracts across a wide range of jurisdictions as our careers progress. As a result an opportunity is emerging for global businesses and global employees to utilise a centralised Government approved retirement solution based in a well regulated international finance centre."

The Authority believes that multinational companies will have great interest in the legislation, since it offers a global solution which provides them with substantial cost savings through centralization of scheme management. The legislation has been written to allow businesses to build substantial flexibility into schemes so that they can be adapted to suit the pension rules and regulations that apply in a wide number of territories. This, the Isle of Man Government believes, should enable Isle of Man based schemes to achieve recognition from the authorities in other jurisdictions.

Mike Lightfoot clarifies that the Isle of Man is not out to compete for domestic pensions business in any territory: "We are bringing to the market a global solution with the objective of providing a bona fide, secure retirement benefits solution to businesses that operate across many jurisdictions. This is not a replacement for domestic schemes, simply a way of centralising the retirement structures established for workers who will move between countries throughout their career in order to achieve simplification, and to reduce overall administration and compliance costs."

To assist recognition in other jurisdictions each authorised scheme (whether it be occupational or personal) is required to be individually authorised by the Isle of Man Insurance & Pensions Authority, and schemes may only be operated by administrators who have been specifically licensed by the Isle of Man Government. Strict vetting and background checks apply to all scheme administrators and trustees, and rigorous rules on record keeping and scheme management are also in place to ensure that very high standards of practice and scheme governance apply.

Tynwald established the Isle of Man Insurance & Pensions Authority in 2000, and in October 2000 passed the Retirement Benefits Schemes Act 2000 (RBSA 2000), a core piece of Legislation which established a broad pensions framework for all schemes operating in or from the Isle of Man. The Insurance & Pensions Authority decided to develop market-specific legislation subordinate to RBSA 2000 by creating separate "international" and "domestic" regulations under the main Act and the Retirement Benefits Schemes (International Schemes) Regulations were enacted in 2001.

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