Bermuda’s reinsurance industry relies on strict regulation – expert | Insurance business America
Kinika Armstrong refers to Section 8 of the Bermuda Insurance Act
reinsurance
By Mav Rodriguez
Kinika Armstrong from Appleby outlined the critical elements needed for Bermuda’s insurance and reinsurance market to continue to thrive and highlighted the importance of effective regulatory oversight in a recent Royal Gazette article.
Armstrong stressed that regulatory oversight is critical to promoting a transparent and accountable insurance environment on the island. According to her, the Bermuda Insurance Act 1978 provides the necessary framework, with the Bermuda Monetary Authority (BMA) acting as the primary regulator.
Section 8 of the Act mandates strict supervision of insurance companies and requires them to act transparently and accountable. The section specifies that insurers, insurance managers and intermediaries must maintain a physical presence on the island.
“This appointment of key personnel enables the BMA to closely monitor the activities of insurance companies, ensure compliance with regulations and protect the interests of policyholders and other stakeholders… It demonstrates a commitment to operating within the regulatory framework and accessible to the BMA “” Armstrong said.
A principal representative (PR), a statutory officer under the Act, is also critical to ensuring an insurer’s compliance, Armstrong explained. The PR must be based in Bermuda, have integrity and have a thorough understanding of insurance laws and regulations, she said. The BMA must approve the PR and ensure they meet certain qualification and experience criteria.
Armstrong said insurers must immediately notify the BMA of any changes to their headquarters or PR and then provide formal written confirmation within 14 days. When registering, insurers must provide the BMA with the location of their head office and provide details of their PR, including name, qualifications and contact information.
Such changes, such as a new headquarters address or the appointment of a new PR, must be reported to the BMA. Armstrong also said that Section 8 prohibits the termination or resignation of a PR without just cause, such as: B. retirement or serious illness. Both parties must notify the BMA in writing 30 days in advance of their intention to terminate the appointment or cease acting as PR to ensure that the BMA remains abreast of leadership changes and can ensure a smooth transition.
PRs must report certain events in writing to the BMA within 14 days, such as possible insolvency, failure to comply with BMA conditions, involvement in a criminal proceeding or cessation of insurance business in Bermuda. Failure to make these reports may result in criminal offenses punishable by fines or imprisonment.
Armstrong concluded that as Bermuda’s insurance landscape continues to evolve, effective Section 8 regulation will be critical to maintaining a robust and well-functioning industry.
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2024-05-27 15:21:38
www.insurancebusinessmag.com
