Notice - Draft Statement of Principles on the Use of Enforcement Powers (Enforcement Powers under the Insurance Amendment Act 2012)

Summary

This Notice from the Bermuda Monetary Authority (BMA) attaches a draft Statement of Principles (SoP) describing how the Authority intends to use enforcement powers being introduced through amendments to the Insurance Act 1978 (via the anticipated Insurance Amendment Act 2012). It is issued for information and consultation ahead of the legislation being enacted, and the BMA expects to apply the same SoP under parallel amendments anticipated for banking, investment business, trust and investment funds legislation.

• Purpose: Sets out general principles guiding whether and how the BMA will escalate compliance issues to enforcement action, rather than creating new licensee obligations itself.
• Process: Describes the supervisory-to-Enforcement Committee referral process, factors considered in deciding whether to take enforcement action, and factors in selecting among enforcement options.
• Enforcement options: Lists available tools: directions, restrictions and conditions; civil penalties (including a per-week late-filing penalty up to $5,000 and a per-breach penalty up to $500,000); injunctions; public censure; objections to controllers; prohibition orders against directors/officers; licence revocation; winding up; and referral to police.
• Publication: Explains the BMA's discretion to publicly disclose enforcement decisions, including prior notification to the licensee before any publication.
• Appeals: Identifies which enforcement actions (e.g. licence revocation, civil penalties, public censure, director prohibition orders) carry a right of appeal to a Tribunal.

Because this is a draft statement issued alongside proposed legislative amendments, it does not itself impose new compliance duties on licensees; it is intended to help industry understand and comment on how enforcement powers will be exercised once the relevant amendment acts are passed and the SoP is formally adopted.

Applies to

insurers licensed under the Insurance Act 1978, banks and deposit companies (anticipated, under future amendments), investment business licensees (anticipated), trust companies (anticipated), investment funds entities (anticipated), corporate service providers (anticipated, under new Act)