BMA Insurance Guidance Note #7 - Fit and Proper Criteria - Principal Representative, Insurance Manager and Intermediaries (March 2005)

Summary

This is Bermuda Monetary Authority Guidance Note #7, setting out the criteria the BMA uses to decide whether a person is fit and proper to act as Principal Representative, or to be registered as Insurance Manager, Broker, Agent or Salesman under the Insurance Act 1978. It applies to both natural persons and bodies corporate seeking approval or registration in these roles, and describes both the initial approval assessment and the Authority's ongoing monitoring of approved persons.

• Competence and capability: Whether the person has relevant experience, skills, knowledge and soundness of judgment, and shows sufficient diligence and time devoted to the role.
• Honesty, integrity and reputation: Criminal convictions, adverse civil findings, disciplinary or regulatory investigations, contraventions of regulatory requirements, justified complaints, licence refusals or revocations, dismissals, director disqualifications, and candour with regulators are all considered.
• Continuing assessment: Fitness and propriety is reassessed on an ongoing basis; imprudent conduct or failure to act with integrity after approval will reflect adversely on the person, and the Authority takes a cumulative view of multiple minor issues.
• Case-by-case treatment of convictions: A criminal conviction does not automatically bar approval; the Authority weighs seriousness, relevance to the role, time elapsed, and evidence of rehabilitation.

Insurers and approved persons must immediately comply with fit and proper related changes introduced by the Insurance Amendment Act 2004, and are expected to come into compliance with other matters in this Guidance Note as soon as possible and no later than 31 December 2005, unless a later date is agreed with the Authority.

Key obligations

• The burden is on the individual and/or sponsoring firm to satisfy the Authority that a candidate for Principal Representative, Insurance Manager, Broker, Agent or Salesman is fit and proper.
• Insurers and approved persons must take immediate steps to comply with fit and proper related changes arising from the Insurance Amendment Act 2004.
• Insurers and approved persons must come into compliance with other matters set out in this Guidance Note as soon as possible and no later than 31 December 2005, or a later date agreed with the Authority.
• Approved persons must continue to meet the fit and proper criteria on an ongoing basis, as the Authority may reassess fitness and propriety at any time, including in relation to new or continuing duties.

Applies to

Principal Representative, Insurance Manager, Broker, Agent, Salesman, insurers

Deadlines

• 31st December 2005: Deadline for insurers and approved persons to come into compliance with matters in this Guidance Note not related to the Insurance Amendment Act 2004, unless a later date is agreed with the Authority.
• immediate: Insurers and approved persons must take immediate steps to comply with changes stemming from the Insurance Amendment Act 2004.