Consultation Comments - Insurance Amendment Act 2016 (Insurance Managers and Other Matters)

Summary

This document is a BMA notice publishing its responses to comments received on the 2016 consultation paper on the Insurance Amendment Act 2016 (Insurance Managers and Other Matters). It is a question-and-answer record clarifying how proposed legislative changes to the Insurance Act 1978 and related regulations will operate, rather than a binding rule in itself.

• Insurance Manager Code of Conduct: BMA confirms a proportionality principle will apply so that insurance managers handling only related-party or group-sponsored insurers may receive modified treatment under the Code.
• AML/ATF scope: All insurance managers are covered by Bermuda's AML/ATF regime, but a proportional, risk-based approach will apply to related-party business based on the manager's own risk assessment.
• Principal representative reporting: Insurance managers acting as principal representatives remain subject to existing Section 8A Insurance Act 1978 reporting duties for insurer non-compliance; the new annual return requirement is additional and intended to support tracking and governance, not replace the existing duty.
• CSP licensing overlap: Insurance managers working only for regulated insurers will not need a Corporate Service Provider licence; those also performing other corporate services will need both an insurance manager and a CSP licence.
• Section 15A(1) amendment: The Insurance Act 1978 will be amended to let the Authority require (rather than prescribe by statutory instrument) compliance declarations, and to add a new declaration item confirming compliance with the minimum liquidity ratio for general business at financial year end.
• Annual fee timing clarification: A new provision (sections 14(2A) and 27B(14)-(16)) clarifies that annual fees paid by insurers and designated insurers relate to the twelve-month period ending 31 December, consistent with existing registration fee practice; the 31 March payment date remains a grace period, not the fee period itself.
• Class 3B and Class 4 fee basis: The Bermuda Monetary Authority Act 1969 will be amended (an earlier planned change that was inadvertently not made) to confirm that annual fees for Class 3B and Class 4 insurers are based on actual gross premium written in the preceding year, not expected gross premiums.
• Consequential regulatory amendments: Corresponding amendments to the Insurance Accounts Regulations 1980 and the Insurance Returns and Solvency Regulations 1980 are noted; BMA acknowledges drafting errors flagged by respondents will be corrected in the final version.

Because this is a consultation feedback document rather than the enacted amendment or code itself, it does not create new standalone obligations; it explains and clarifies obligations that will arise once the underlying Insurance Amendment Act 2016 and related regulations and codes take effect.

Key obligations

• Insurance managers acting as principal representatives must continue to comply with Section 8A Insurance Act 1978 reporting duties regarding insurer non-compliance
• Insurance managers performing corporate services beyond regulated insurance business must hold both an insurance manager licence and a Corporate Service Provider Business Act 2012 licence
• Registered insurers, insurance managers, brokers, agents and salesmen must pay the prescribed annual fee before 31 March each year following their year of registration, with the fee applying to the twelve-month period ending 31 December

Applies to

insurance managers, registered insurers, principal representatives, Class 3B insurers, Class 4 insurers, corporate service providers, brokers, agents, salesmen

Deadlines

• before 31 March in every year following registration: Existing statutory deadline for payment of the annual business fee by registered insurers, insurance managers, brokers, agents or salesmen, clarified as covering the period 1 January to 31 December of that year