The Hon. Nigel Feetham KC MP, Minister for Justice, Trade and Industry

Madam Speaker, I rise to make this Ministerial Statement to update our Parliament and our country on the implementation of an important manifesto commitment.  

During the election and as a manifesto commitment, the GSLP Liberal Alliance committed to “explore the feasibility of a Government-owned captive insurance company. This initiative has been conceived with a view to secure competitive insurance for the Government, address public interest insurance needs, and bolster the talent pool.” 

The insurance solution for elderly citizens was explained during the election campaign as ‘bespoke’, further stating it would be set up through a ‘captive insurance product’. 

The rationale was explained in a GSLP Liberal press release on or around the 3 October 2023 as follows:

Fabian Picardo KC MP, as leader of the GSLP and now re-elected Chief Minister leading this Government, said: “We know that this is a real issue of genuine and painful impact on our elderly and infirm.”

“Before we left the EU, all our citizens who were well enough to travel but that had any long-term conditions or, quite simply, an apprehension about their potential frailty, had the comfort of knowing that whenever they crossed the border into Spain, whether for regular trips for short periods or on longer trips away, their healthcare needs would be covered by the E-111 programme.” 

“Since our departure, those same citizens have either had to take out specific travel insurance endorsed for their pre-existing conditions, paying significant premiums, or, more likely, for those unable to afford them, they have simply had to give up on travel altogether or assumed a real risk by travelling without such cover.” 

“We will provide a solution for them.” 

I myself also explained in the press release how we contemplated this could be structured as follows:

“In the last few weeks, I have been indicating that, as Minister for Financial Services, if we are elected on 12 October, I will work to set up a captive insurance product”.

“I will work with the providers in the insurance industry locally to create and deliver a solution, however innovative or revolutionary, that addresses this real need in the community. We will work to deliver this solution.”

The solution was identified as a captive arrangement for the Government as policyholder insured with a local insurance provider. 

We must remind ourselves that insurance with a commercial insurer is unsuitable precisely because of exclusions for pre-existing medical conditions and the high cost of premiums (even where it is available). 

The insurance that will therefore be in place, whilst bespoke, will have terms and conditions, and will be subject to coverage limits. 

Insurance will be provided to the Government via the cell captive and only the Government can bring a claim under the policy.

The Government will, in turn, separately set up a government-administered scheme under which the Government will reimburse covered medical costs of Eligible Citizens within the terms and conditions of the scheme. 

The Government has negotiated the bespoke captive arrangement with Aon’s White Rock PCC insurance subsidiary in Gibraltar, White Rock Insurance (Gibraltar) PCC Limited (White Rock). Aon is a leading global provider of insurance services and White Rock, a leading cell company facility for Aon clients, licensed and regulated by the Gibraltar Financial Services Commission. 

This scheme is only intended to cover medical treatment in the event of an emergency where an Eligible Person cannot be transported back to Gibraltar to receive appropriate medical treatment at St Bernard’s Hospital and treatment in the nearest Spanish hospital or by the nearest doctor is medically necessary. Where the medical situation is not an emergency the Eligible Person shall be transported back to Gibraltar for appropriate medical care.

Examples of such emergency would be a bad fall or accident requiring immediate medical attention, a heart attack or a stroke. 

We will allow a pre-existing medical condition of an Eligible Person (with some control for serious medical conditions), provided that the Eligible Person shall not be travelling to the Territory for the purpose of seeking medical treatment.  

Prescription drugs and medical supplies unrelated to emergency medical treatment would not be covered. 

Madam Speaker, we will be setting up an online registration and reimbursement process and will put in place an initial paper registration process to aid our elderly citizens during the scheme launch. Eligible Persons should refer to the detailed terms and conditions of the scheme we will publish including the limitations and exclusions. 

The message our Government wishes to convey is that the scheme we will put in place following this announcement has to be done sensibly and carefully balancing the necessity of providing tangible coverage for eligible elderly citizens they could NOT otherwise obtain in the open insurance market, but underpinned by a captive insurance arrangement backed by the Government that requires it to be properly executed to ensure there is no unnecessary abuse or leakage of public funds. We will be announcing the terms and conditions of the government-administered scheme shortly. 

Of course, if we get a Treaty, the solution we have announced today will not be needed; hence we propose that the scheme will be for an initial period of 6 months, and this also will allow us to implement it in a controlled manner on the basis of a ‘pilot scheme’ as a means of protecting public finances. 

It is important to emphasise too Madam Speaker, that this scheme is ONLY intended for emergency medical treatment whilst travelling to Andalucia Southern Spain and that there are limits and exclusions which allows us to quantify and calculate the ultimate cost of this scheme for the Government. In addition, there will be an eligibility criteria (including age) to ensure that the generosity of the taxpayer is not abused.

Once the scheme is up and running, the Government will be able to build claims experience and evaluate the possibility of extended coverage outside Andalucia and also obtaining reinsurance.

We emphasise Madam Speaker that this scheme is not a substitute for private insurance if an Eligible Person has such private insurance or can purchase it.  

Finally, Madam Speaker, I am pleased to announce to Parliament that the contracts with the two tax professionals the Tax Office are recruiting have been successfully signed, and they will soon be submitting their respective notices to their current employers. As previously communicated, I want to reiterate the importance of this step. It is essential to ensure that large corporations contribute their fair share of corporate taxation. This measure is crucial for sustaining the level of public expenditure that we often take for granted and for avoiding the burden of increased taxation on the working population, which would disproportionately impact them.

Compared to other jurisdictions, which are raising revenue through increasing personal income tax on the working population, our proposals adhere to key principles:

We will prioritise avoiding direct taxation on working individuals, exploring alternatives before considering such measures;

We will attempt to impose tax firstly where economic changes (such as increased interest rates) have increased profits, alternatively we will aim to be as neutral as can be achieved;

We will strive to work within the existing tax regime in order to minimise upheaval.

I am obliged Madam Speaker.