Regulatory (Insurance Code of Conduct) Code, 2021

Summary

This Code, issued by the BVI Financial Services Commission under the Financial Services Commission Act, 2001, sets out detailed market conduct rules for the insurance sector. It came into force on 6 July 2021 and has the force of law as subsidiary legislation, meaning every insurer, insurance intermediary and loss adjuster to whom it applies must comply and can demonstrate compliance to the Commission.

• Scope: Applies to Category A and Category B insurers and insurance intermediaries licensed under the Insurance Act to carry on domestic business, to loss adjusters (including public adjusters), and to branches or representative offices of Category A or B insurers operating in the Virgin Islands; it does not apply to reinsurance business.
• General conduct principles: Requires insurers, intermediaries and loss adjusters to act with honesty, integrity, transparency and good faith, and to treat customers fairly throughout the life of a policy.
• Pre-sale disclosure: Insurers and intermediaries must give customers sufficient, understandable information before sale, including intermediary status, product characteristics, premiums, charges, exclusions, and rights and obligations under the contract.
• Post-sale documentation: A cover note must be given at the time a contract is entered into, and full policy documentation (including risks, exclusions, premiums, dates of coverage and significant limitations) must be provided within 45 days of entering the contract.
• Claims and complaints: Insurers and intermediaries must process claims and customer complaints promptly and fairly, and manage conflicts of interest appropriately.
• Loss adjuster conduct: Loss adjusters must disclose whom they act for, manage conflicts of interest, keep client information confidential, maintain written claim investigation procedures, and update clients on claim progress at fourteen day intervals.

Breach of the Code exposes a licensee to enforcement action by the Commission under the FSC Act, including directives, mandatory appointment of advisers, investigations, administrative penalties, public statements, and consideration in fit-and-proper assessments.

Key obligations

• Insurers and insurance intermediaries must provide customers with sufficient and appropriate pre-sale information (status, product features, costs, exclusions, rights and obligations) before entering a contract
• Insurers and insurance intermediaries must give a cover note summarising terms and conditions at the time the customer enters into the contract
• Insurers and insurance intermediaries must provide the customer with full policy documentation, terms and conditions within 45 days of entering into the insurance contract
• Insurers and insurance intermediaries must inform customers of their rights and obligations (disclosure, cancellation, claims, complaints) before concluding the contract
• Insurers and intermediaries must promptly and fairly process claims and consider customer complaints
• Insurers, intermediaries and loss adjusters must manage conflicts of interest and maintain confidentiality of customer/claimant information
• Loss adjusters must maintain written procedures covering all steps of claim investigation and settlement negotiation
• Loss adjusters must inform clients on the progress of each claim at fourteen day intervals
• Loss adjusters acting for an insurer must disclose to claimants that they are acting on behalf of the insurer and explain their role
• Loss adjusters acting for a claimant must, before acting, explain the process, services and proposed fees to the claimant

Applies to

Category A insurers, Category B insurers, insurance intermediaries, loss adjusters, public adjusters, branches or representative offices of Category A or B insurers

Deadlines

• 6th day of July, 2021: Commencement date of the Code
• within 45 days of entering an insurance contract: Insurer or intermediary must provide the customer with a copy of the insurance policy, terms and conditions and/or separate documentation
• fourteen (14) day intervals: Loss adjuster must inform clients on the progress of each claim being investigated or negotiated