In this FAQ, we delve into the revisions made to the Bermuda Insurance Code of Conduct and provide insights from an interview with George Jones, Executive Board Member, shedding light on the significance and implications of these changes.
What is the Bermuda Insurance Code of Conduct?
The Bermuda Insurance Code of Conduct, commonly referred to as the Code, is a regulatory framework issued by the Bermuda Monetary Authority (BMA) in accordance with the powers granted under Section 2BA of the Insurance Act 1978.
This Code sets out specific duties, requirements, and standards that must be adhered to by all insurers registered under Section 4 of the Act. This includes a wide range of insurers, such as commercial and limited-purpose insurers, as well as holders of various licenses within the insurance industry. The primary objectives of the Code are to ensure customer protection and promote best practices within Bermuda's insurance sector.
What are the revisions to the Bermuda Insurance Code of Conduct?
The revisions to the Bermuda Insurance Code of Conduct, effective from September 1, 2022, brought about detailed enhancements to Sections 1 to 7 of the Code. Additionally, a new Section 8 was introduced as part of these revisions. These changes aim to further strengthen the regulatory framework and enhance industry practices.
What happens if there is a failure to comply with the Bermuda Insurance Code of Conduct?
Failure to comply with the provisions outlined in the Code will be a factor considered by the Bermuda Monetary Authority (BMA) when assessing whether an insurer is meeting its obligation to conduct its business soundly and prudently. Non-compliance can have serious implications for insurers, making it essential to adhere to the Code's requirements.
What is the deadline for compliance with the revised Bermuda Insurance Code of Conduct?
Insurers are required to achieve compliance with the revised Bermuda Insurance Code of Conduct by the following deadlines:
- For Sections 1 to 7 (which pertain to corporate governance, risk management frameworks, governance mechanisms, and outsourcing), compliance is required by September 1, 2023.
- For Section 8 (related to the conduct of business), compliance should have been achieved by March 1, 2023.
It's crucial for insurers to meet these deadlines to ensure they adhere to the regulatory requirements.
How does the concept of "Proportionality of Compliance" apply to insurers?
The Bermuda Monetary Authority (BMA) will assess each insurer's adherence to the Code proportionately, taking into consideration the insurer's nature, scale, and complexity. These factors encompass the relationship between policyholders and insurers, the size of the business, and the complexity of organisational structures. This tailored approach ensures that compliance expectations align with an insurer's specific characteristics.
How can Ocorian Law help?
If you’re still uncertain, our team can provide expert guidance and support on the regulatory changes. Contact a member of Ocorian Law today.