Guidance Note #8: Appointment and Duties of the Insurance Manager (March 2005)

Summary

This is BMA Guidance Note #8, explaining how the Insurance Act 1978 (as amended) and its regulations apply to the registration, appointment and duties of Insurance Managers in Bermuda. It is aimed at insurers, self-managed or manager-appointed, and at persons acting or wishing to act as Insurance Managers, clarifying the Authority's expectations rather than creating new law.

• Registration required: No person may act as an insurance manager in or from Bermuda unless registered with the Authority, and applications must be made in the form and with the information the Authority requires (Form 3).
• Fit and proper standard: The Authority assesses whether an applicant Insurance Manager is fit and proper and has adequate knowledge of the insurer's business; a manager that becomes aware it no longer meets this standard must promptly inform the Authority and provide supporting information on request.
• Cancellation grounds and process: The Authority may cancel a manager's registration on specified grounds (false information, inactivity for two years, ceasing business, unpaid fees, non-compliance, convictions, unsound practices), after giving written notice and allowing 30 days for objection; cancellation takes effect 21 days after service unless a later date is specified.
• Notification duties: Insurers must notify the Authority in writing of the appointment of an Insurance Manager at the time of the insurer's registration, and must give written notice of any change of Insurance Manager within 14 days.
• Ongoing duties of the Manager: An Insurance Manager must maintain an accurate list of all insurers it manages and provide it to the Authority on written request; must assist any Authority-appointed inspector by producing records and giving reasonable assistance; and must maintain adequate books and records in Bermuda (receipts/expenditure, premiums and claims, assets/liabilities/equity) accessible to the Principal Representative.
• Management agreement: There should be a formal management agreement between the Insurance Manager and the insurer setting out their respective functions, duties and responsibilities.

The Note also flags that changes introduced by the Insurance Amendment Act 2004 require immediate compliance, while for other matters covered by the Guidance the Authority encourages compliance as soon as possible and in any event by 31 December 2005, unless a later date is agreed with the Authority.

Key obligations

• A person must be registered by the Authority before acting as an insurance manager in or from Bermuda.
• Applications for registration as an insurance manager must be made using the required form (Form 3) with the information and documents the Authority requires.
• An Insurance Manager that becomes aware it no longer meets eligibility or fit and proper criteria must take timely steps to inform the Authority.
• An Insurance Manager must provide information to the Authority, on reasonable request, demonstrating it meets eligibility and fit and proper criteria.
• An insurer must notify the Authority in writing of the appointment of its insurance manager, including particulars, at the time of the insurer's registration.
• An insurer must give the Authority written notice of any change in its Insurance Manager within fourteen days.
• An Insurance Manager must maintain an accurate list of all insurers for which it acts and provide a copy to the Authority upon written request.
• An Insurance Manager must produce books, records and documents to an Authority-appointed inspector on request and give reasonable assistance with any investigation.
• An Insurance Manager must maintain adequate books and records in Bermuda, including receipts/expenditure, premiums/claims, and assets/liabilities/equity, accessible to the Principal Representative.
• An insurance manager subject to a cancellation notice has 30 days after receipt to make a written objection to the Authority.
• Insurance Managers must take immediate steps to comply with changes introduced by the Insurance Amendment Act 2004.
• Insurance Managers are encouraged to come into compliance with other matters in the Guidance as soon as possible, and no later than 31 December 2005, unless a later date is agreed with the Authority.

Applies to

insurers, insurance managers, Principal Representatives

Deadlines

• 31 December 2005: Deadline (or later date agreed with the Authority) by which Insurance Managers are encouraged to come into compliance with matters in the Guidance other than the Insurance Amendment Act 2004 changes, which require immediate compliance.
• within fourteen days: Insurer must give the Authority written notice of a change in its Insurance Manager.
• within 30 days after receipt of notice: Insurance manager's period to make a written objection to a proposed cancellation of registration.
• twenty-one days after the date of service: Cancellation of an insurance manager's registration takes effect, unless a later date is specified in the cancellation order.