Notice - Insurance Code of Conduct (revised) July 2015 (2015-07-29)

Summary

This is a Bermuda Monetary Authority notice announcing a revised Insurance Code of Conduct, posted for information and guidance. The Code sets out duties, requirements and standards for (re)insurers registered under Section 4 of the Insurance Act 1978, and compliance failures are a factor the Authority considers when assessing whether an insurer is conducting business in a sound and prudent manner.

• Board and insurance manager: New requirement (paragraphs 17-19) that the board ensure its insurance manager is fit and able to carry out its duties; only limited purpose insurers may outsource the CEO and senior executive roles to an insurance manager.
• Internal audit staffing: Paragraph 51's first bullet has been reworded to clarify how the internal audit function must be staffed.
• Outsourcing considerations: Paragraphs 60 and 61 have been reworded to clarify considerations that must be taken into account regarding whether and how outsourcing of certain functions should occur.

The revised Code takes effect formally immediately upon publication, but insurers are given until December 31st 2015 to achieve compliance with the changes.

Key obligations

• (Re)insurers registered under Section 4 of the Insurance Act 1978 must comply with the revised Insurance Code of Conduct by December 31st 2015.
• The board must ensure its insurance manager is fit and able to carry out its duties to ensure prudent operation of the insurer.
• Only limited purpose insurers may outsource the CEO and senior executive roles to an insurance manager.
• Insurers must staff their internal audit function in accordance with the clarified requirement in paragraph 51.
• Insurers must apply the clarified considerations in paragraphs 60 and 61 when determining whether and how to outsource certain functions.

Applies to

(re)insurers registered under Section 4 of the Insurance Act 1978, limited purpose insurers

Deadlines

• immediately upon publication (July 29th 2015): The revised Insurance Code of Conduct comes into effect formally.
• December 31st 2015: Established deadline for compliance with the revised Code.