Insolvency (Amendment) Act, 2022

Summary

This Act amends the Insolvency Act, Revised Edition 2020, primarily to give the Virgin Islands Deposit Insurance Corporation (VIDIC) a formal role in the insolvency and liquidation of banks, and to shift administration of certain Insolvency Act funds from the Financial Services Commission to the Government. It comes into force on a date to be appointed by the Minister via Gazette notice, so it is not automatically effective on passage.

• New definitions: Adds definitions of bank, International Tax Authority and VIDIC to section 2 of the principal Act, and removes the reference to the Commission from the definition of Official Receiver.
• VIDIC's liquidation powers: VIDIC is added alongside the Commission and International Tax Authority as a body entitled to apply to appoint, or be notified about, liquidators of regulated persons, but VIDIC may only apply to appoint a liquidator of a bank if the bank is in financial distress or placed into resolution and VIDIC is empowered under Deposit Insurance Act rules to act as liquidator.
• Notice before member-appointed liquidators: Members of a regulated company may not appoint a liquidator by resolution unless at least 5 business days written notice has been given to VIDIC (for banks) or the Commission (for other regulated persons), unless a shorter period is accepted in writing.
• Reporting to Commission, ITA and VIDIC: Liquidators of regulated persons must send the Commission, and where relevant the International Tax Authority or VIDIC, copies of final reports and statements of realisations and distributions, and must notify the Commission of liquidation-related steps for regulated persons.
• Insolvency Surplus Account: Responsibility for the Insolvency Surplus Account and appointment of the officer administering it moves from the Commission to the Government.
• Minor drafting fixes: Corrects cross-references, replaces revoke with cancel in section 479, and fixes a pronoun error in section 490.

The amendments are largely procedural, integrating VIDIC into bank insolvency processes and clarifying notice, reporting and fund-administration duties; they do not create new licensing categories but affect how regulated persons, liquidators, the Commission, the International Tax Authority and VIDIC interact during insolvency proceedings.

Key obligations

• Members of a regulated company (other than a bank) must give at least 5 business days written notice to the Commission before appointing a liquidator by resolution, unless a shorter period is accepted in writing.
• Members of a bank must give at least 5 business days written notice to VIDIC before appointing a liquidator by resolution, unless a shorter period is accepted in writing.
• VIDIC may only apply to appoint a liquidator of a bank if the bank is in financial distress or placed into resolution and VIDIC is empowered under Deposit Insurance Act rules to act as liquidator of the member institution or its holding company or subsidiary.
• Liquidators of a company that is a regulated person must send the Commission a copy of the final report and statement of realisations and distributions sent to creditors and members.
• Liquidators appointed on the application of the International Tax Authority or VIDIC must send that body a copy of the final report and statement of realisations and distributions.
• Notice of the liquidation of a regulated person must also be given to the Commission under section 271.
• On distribution of the Insolvency Surplus Account and related administrative matters, references to the Commission are replaced with the Government, transferring those administrative responsibilities.

Applies to

banks, regulated persons under the Insolvency Act, liquidators, Official Receiver, Virgin Islands Deposit Insurance Corporation (VIDIC), International Tax Authority, Financial Services Commission

Deadlines

• on such date as the Minister may, by Notice published in the Gazette, appoint: Commencement of the Insolvency (Amendment) Act, 2022
• at least 5 business days: Minimum written notice members must give to VIDIC or the Commission before appointing a liquidator by resolution under amended section 159(5)

Related documents

• This document amends Insolvency Act (Revised 2020)
• Insolvency (Amendment) Rules, 2023 commences this document