Insurance Amendment No. 1 Act 2022 (Bill)

Summary

This is a draft Bill (not yet enacted) that would amend the Bermuda Insurance Act 1978 across multiple provisions. Its main purpose is to formally bring insurance marketplace providers under the Authority's supervisory regime, adjust registration and conditions powers, refine officer definitions and notification requirements, and overhaul the insolvency priority rules applicable to composite insurers being wound up. It also makes a consequential amendment to the Bermuda Monetary Authority Act 1969.

• Insurance marketplace providers: Section 2 is amended so the Authority's supervisory powers expressly extend to insurance marketplace providers, alongside existing categories such as brokers, agents and salesmen.
• Innovative intermediaries: Section 6E is extended to cover innovative intermediaries as well as innovative insurers.
• Conditions on registration (section 10): The Authority may add, vary or delete conditions on the registration of an insurance manager, broker, agent, insurance marketplace provider or salesman, either on application or on its own initiative, but must give notice and consider written representations before acting where there was no application.
• Officer definitions (section 30CA, 30J): New definitions of 'officer' are inserted for insurance marketplace providers, insurance managers/brokers/agents, and innovative insurers for notification-of-change purposes.
• Notification events (section 30JE): The list of events that insurance managers or intermediaries must notify to the Authority is expanded to include amalgamation, acquisition or merger with another firm.
• Declaration of compliance (section 31AA): Insurance groups and commercial insurers that fail to comply with the enhanced capital requirement must submit an updated 'declaration of compliance' (replacing the former 'general business solvency certificate' terminology).
• Winding-up priority rules (section 36): Detailed new rules govern how assets of the long-term and general business funds of a composite insurer are applied where one fund is insufficient to meet its debts, setting a clear order of priority between preferential debts, insurance debts and other debts, including cross-application between funds.
• Housekeeping amendments: References to 'innovative insurer' are removed from sections 17(4)(b) and 18A(2)(b) because that insurer class is not required to file statutory financial statements; section 30J(5) and (7)(b) and section 30JEA(3) are repealed as no longer applicable.

The Bill also makes a consequential amendment to the Bermuda Monetary Authority Act 1969, adding fee-related powers for varying or reclassifying registration conditions under the new section 10 provisions. Commencement is left as a placeholder date pending finalisation.

Key obligations

• Insurance managers, brokers, agents, insurance marketplace providers or salesmen who receive a notice under section 10(3) must make written representations within the period specified in that notice if they wish to contest a variation, addition or deletion of registration conditions.
• Insurance managers or insurance intermediaries must notify the Authority of amalgamation, acquisition of, or merger with another firm under the expanded section 30JE(3) notification requirements.
• Insurance groups and commercial insurers that fail to comply with the enhanced capital requirement must submit an updated declaration of compliance under amended section 31AA.

Applies to

insurance managers, brokers, agents, insurance marketplace providers, salesmen, innovative insurers, innovative intermediaries, composite insurers, insurance groups, commercial insurers

Deadlines

• XX XXX 2022 (placeholder, not yet finalised): Stated commencement date of the Act, left blank in the Bill text pending finalisation.

Related documents

• This document amends Bermuda Monetary Authority Act 1969
• This document amends Insurance Act 1978