Conduct Consultation Paper Stakeholder Letter (2021-04-23)

Summary

This is a stakeholder letter from the Bermuda Monetary Authority summarising industry feedback on its December 2020 Consultation Paper proposing a Conduct of Business Regulatory Regime, and setting out the Authority's responses. It does not itself impose new binding requirements, but signals the Authority's intended approach and timeline for future rule-making affecting banks and insurers.

• Legislative change: The Authority intends to bring forward a bill this year to amend the Bermuda Monetary Authority Act 1969 to give it statutory remit over conduct of business.
• Sector approach: The Authority will address conduct of business on a sector-by-sector basis, starting with insurance and banking, by revising existing sector codes of practice/conduct rather than issuing a single cross-sector rule.
• Upcoming consultations: Later in 2021 the Authority plans to issue separate consultation papers proposing amendments to the existing insurance code of conduct and a new code of conduct for banks.
• Transition period: The Authority proposes a transition period once revised codes are issued, to allow licensees and registrants time to embed new policies, processes and controls.
• Retail versus non-retail: Overarching conduct principles will apply to all customer types, but a risk-based, proportionality approach will continue for non-retail relationships, with retail-specific provisions marked as such in the codes.
• Cross-border business: Conduct requirements will apply to relevant licensees' and registrants' business generally; the Authority will take an outcomes-based approach when assessing equivalence with foreign regulatory standards, but entities must meet Bermuda's code requirements at a minimum.

No new filing obligations or deadlines are created by this letter itself; it is a status update ahead of further sector-specific consultation papers and eventual code revisions.

Applies to

licensees, registrants, banks, insurers

Deadlines

• later half of 2021: The Authority plans to issue separate consultation papers proposing amendments to the insurance code of conduct and a new code of conduct for banks.