Introduction
Upon the entering of Cyprus in the European Union (EU) in 2004, insurance and reinsurance brokerage in Cyprus has been a thriving industry that offers a wide range of services to both local and international clients. It is convenient to say that today the Cyprus insurance and reinsurance brokerage sector is highly competitive, and the implementation of EU directives has made the regulation of the sector more sophisticated, as well as more effective than ever. This growth has been driven by the country’s strong economy and its strategic location as a gateway between Europe, Asia, and Africa.
It is important to state that the role of insurance and reinsurance brokers is to act as intermediaries between insurance companies and policyholders. They provide advice to policyholders on the type of insurance coverage that is most suitable for their needs and help them to secure the best possible premiums.
Regulator
Insurance and reinsurance brokerage in Cyprus is regulated by the Insurance Companies Control Service (ICCS), which is part of the Ministry of Finance. In order to operate as an insurance and reinsurance brokerage in Cyprus, companies must obtain a license from the ICCS. The ICCS ensures that insurance and reinsurance brokerage companies operating in Cyprus are financially stable and able to meet their obligations to clients. It also sets minimum capital requirements and monitors the activities of brokerage firms to ensure compliance with regulations.
In the event of a breach of regulations or unethical behavior, the ICCS has the authority to impose penalties, revoke licenses, or take other disciplinary action against insurance and reinsurance brokerage companies in Cyprus.
License & Requirements
To obtain a license from the ICCS, insurance and reinsurance brokerage companies must fulfill certain requirements, such as having a minimum paid-up capital of approximately €20,000- (Twenty Thousand Euro) providing proof of professional indemnity insurance and appointing a Cyprus licensed director.
Once licensed, insurance and reinsurance brokerage companies in Cyprus must comply with a number of regulations, including the “Insurance and Reinsurance Services and Other Related Issues of 2016 [Law 38(I) 2016]” (the “Law”). These laws set out requirements for the conduct of business, the handling of client funds, and the reporting of financial information.
In addition to being licensed, insurance brokers in Cyprus are also required to be members of the Cyprus Insurance Brokers Association (CIBA), which is the professional association for insurance brokers in the country. CIBA is responsible for setting ethical and professional standards for its members, as well as promoting the interests of the insurance brokerage industry in Cyprus.
Advantages
There are several reasons why someone might choose to establish an insurance and reinsurance brokerage company in Cyprus. Some of these reasons include:
- Favorable business environment: Cyprus has a favorable business environment, with a stable political system, low corporate tax rates of just 12.5%, making it one of the most attractive destinations in Europe for such businesses, and a strategic location that makes it an ideal gateway to the European Union, the Middle East, and Africa.
- Strong insurance sector: Cyprus has a strong insurance sector, with a number of international insurance and reinsurance companies operating in the country. This provides a favorable environment for insurance and reinsurance brokerage companies to thrive.
- Skilled workforce: Cyprus has a well-educated and skilled workforce, which is important for the success of an insurance and reinsurance brokerage company. The country has a long tradition of providing education and training in the insurance and reinsurance sector, and many of its workers have advanced degrees in these fields. This ensures that insurance and reinsurance brokers in Cyprus are well-equipped to handle even the most complex and challenging cases.
- Good infrastructure: Cyprus has good infrastructure, including modern transportation networks and telecommunications systems, which are important for the smooth operation of an insurance and reinsurance brokerage company.
- Access to the European Union market: As a member of the European Union, Cyprus allows companies to access the EU market, which is the largest single market in the world. This can be beneficial for insurance and reinsurance brokerage companies looking to expand their operations and tap into new markets.
- Strong regulatory framework: Cyprus has a strong regulatory framework for the insurance sector, which helps to protect the interests of consumers and promote fair competition among insurance and reinsurance companies. This can be beneficial for insurance and reinsurance brokerage companies that want to operate in a well-regulated and transparent environment.
- Attractive tax incentives: Cyprus offers attractive tax incentives for companies operating in the insurance and reinsurance sector, such as tax exemptions on profits from reinsurance activities and reduced corporate tax rates. This can help insurance and reinsurance brokerage companies to maximize their profitability and competitiveness.
- Robust legal system: Cyprus has a robust legal system that provides effective protection for the rights and interests of businesses operating in the country. This can be important for insurance and reinsurance brokerage companies that want to operate in a stable and secure legal environment.
Conclusion
In conclusion, Cyprus is an excellent destination for insurance and reinsurance brokerage. Its low tax rates, highly skilled workforce, and strong regulatory framework make it an attractive location for companies in this sector. Whether you are a local business looking for insurance solutions or an international company looking to expand into the European market, Cyprus is an ideal choice, and our office is in the strong position to discuss and assist for a comprehensive establishment and/or relocation of your already existing insurance and reinsurance brokerage business to Cyprus.
