Notice - Insurance Code of Conduct (Revised) July 2015 (2015-07-15)

Summary

This notice announces that the Bermuda Monetary Authority (BMA) is posting a revised version of the Insurance Code of Conduct (the Code) for information and consultation. The Code sets out duties, requirements and standards of conduct that (re)insurers registered under the Insurance Act 1978 must observe, and compliance is a factor the Authority considers when assessing whether an insurer is conducting business in a sound and prudent manner.

• New board requirement: A new provision (paragraphs 17, 18 and 19) requires that, for insurers other than Class 3B, Class 4 and Class E insurers, where chief and senior executive responsibilities are outsourced to an insurance manager under an agreement, the board must ensure the insurance manager is fit and proper and has the capacity to carry out those functions.
• Internal audit staffing clarified: Paragraph 51's first bullet has been reworded to clarify how the internal audit function must be staffed.
• Outsourcing restrictions clarified: Paragraphs 60 and 61 have been reworded to make clear the conditions under which outsourcing of certain functions should not occur.

The notice indicates the revised Code is being circulated for consultation rather than being immediately in force, and does not specify a submission deadline or effective date for the changes in the text provided.

Key obligations

• Where an insurance manager is engaged to perform chief or senior executive functions under an outsourcing agreement, the insurer's board must ensure the insurance manager is fit and proper and has the capacity to execute those functions (applies to insurers other than Class 3B, Class 4 and Class E insurers).
• Insurers must staff their internal audit function in accordance with the clarified requirements in paragraph 51.
• Insurers must not outsource certain functions where the conditions described in paragraphs 60 and 61 apply.

Applies to

(re)insurers registered under Section 4 of the Insurance Act 1978, insurers other than Class 3B, Class 4 and Class E insurers