FSC Approved Forms and Related Guidelines (Amendment) 2014

Summary

This instrument amends the BVI Financial Services Commission's Approved Forms and Related Guidelines (originally issued 30 March 2010), effective 15 June 2014. It adds a new Part 5B to the Schedule of approved forms: a standard Deed of Trust to be used by a 'specified foreign insurer' licensed under the Insurance Act, 2008 that wishes to establish a domestic business trust to satisfy its domestic liabilities under the Insurance Regulations, 2009.

• Introduction amended: References to 'six specific Parts' and 'the fifth Part' in the Guidelines are updated to 'seven specific Parts' and 'Part 5', reflecting the addition of the new Part.
• Paragraph 1 amended: New sub-paragraphs 1.4 and 1.5 clarify that post-licensing transactions requiring approved forms include submission of a director/trustee's certificate (Part 5A) and, for specified foreign insurers establishing a domestic business trust, submission of a Trust Deed using the new Part 5B form.
• Paragraph 3 amended: A new sub-paragraph (fb) is inserted describing Part 5B as to be completed by an authorised signatory of the specified foreign insurer and countersigned by an authorised signatory of the trustee.
• New Part 5B added to Schedule: A full template Deed of Trust is inserted, setting out the mechanics of the domestic business trust, including trustee reporting duties, company covenants, trustee resignation/removal, appointment of a new trustee, remuneration, indemnities, amendment, access to information, termination and governing law.

In practical terms, this guidance mandates the standard form and terms that must be used whenever a specified foreign insurer sets up a domestic business trust in the BVI, and it embeds ongoing reporting and funding obligations for the insurer and its trustee once such a trust is executed.

Key obligations

• A specified foreign insurer under the Insurance Act, 2008 that establishes a domestic business trust must use the approved Part 5B Deed of Trust form, countersigned by an authorised signatory of the trustee.
• The trustee must, on or before the fourteenth day of each calendar month (or the next business day if that is not a business day), provide the Commission and the Company a statement of the assets comprised in the Trust Fund and their value as at the last business day of the previous month.
• The Company must provide the Commission and Trustee, on or before the fourteenth business day of the month following each quarter, a statement detailing its domestic liabilities as at the last business day of the previous month.
• If the value of the Trust Fund falls below the Company's domestic liabilities, the Company must make an immediate payment or transfer into the Trust Fund to restore the required value.
• The Trustee may resign only by giving the Commission and the Company not less than 42 days' written notice, and resignation is not effective until a replacement trustee is appointed.
• The Company must appoint a new trustee as soon as reasonably practicable and in any event not less than 60 days after a resignation or removal notice, failing which the Commission may appoint one.
• The trusteeship of the domestic business trust must be held solely by a holder of a Class I trust licence under the Banks and Trust Companies Act, approved by the Commission as fit and proper.
• The Trustee may not make payments from, or transfer assets out of, the Trust Fund without prior or simultaneous written approval of the Commission, except as specifically permitted in the Deed.

Applies to

specified foreign insurers licensed under the Insurance Act, 2008, Class I trust licensees under the Banks and Trust Companies Act (trustees of domestic business trusts), insurance licensees generally (users of the FSC Approved Forms)

Deadlines

• 15 June 2014: Effective date on which the amended Guidelines, including the new Part 5B Deed of Trust form, come into effect.
• on or before the fourteenth day of each calendar month (or next business day): Trustee must provide the Commission and the Company a statement of Trust Fund assets and their value.
• on or before the fourteenth business day of the month following each quarter: Company must provide the Commission and Trustee a statement of its domestic liabilities.
• not less than 42 days' written notice: Minimum notice period for the Trustee to resign.
• not less than 60 days after resignation or removal notice: Deadline for the Company to appoint a new trustee before the Commission may appoint one.