Insurance Amendment Act 1998

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Insurance Amendment Act 1998


1998 : 8


[Date of Assent 23 March 1998]

[Operative Date 23 March 1998]

WHEREAS it is expedient to amend the Insurance Act 1978 and
the Companies Act 1981:

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:

Short title
1 This Act may be cited as the Insurance Amendment Act 1998.

Amends Insurance Act 1978
2 (1) After section 57 of the Insurance Act 1978 there shall be

"Designated investment contracts
57A (1) For the purposes of this section—

"contract" includes investment or security, and any
reference to "parties" in relation to an investment or
security shall be taken to be a reference to its issuers
and investors; and



"designated investment contract" means—

(a) any contract (including, but not limited to, any
option contract, futures contract, swap contract,
derivative contract, contract for differences or
security) the purpose of which is to secure a profit or
avoid a loss—

(i) by reference to fluctuations in the value
or price of property of any description,
or in an index, or other factor, specified
for that purpose in the contract, or

(ii) based on the happening of a particular
event specified for that purpose in the
contract; and

(b) in relation to which the Minister has given a
direction under subsection (2).

(2) The Minister may direct in writing that a contract falling
within paragraph (a) of the definition of designated investment
contract in subsection (1), which was submitted to him in draft
together with—

(a) the fee of $1000, or such other fee as may be
prescribed under the Government Fees Act 1965,

(b) such other documents as the Minister may require,

is a designated investment contract for the purposes of this

(3) A direction under this section—

(a) may be made with retroactive effect;

(b) may be subject to conditions which may be varied at
any time, provided—

(i) that the variation has been applied for, or is
consented to by the parties to the contract
in question; and

(ii) that those parties undertake to notify such other
persons as the Minister considers may be
affected by the variation;

(c) is not a statutory instrument having legislative



(4) Being a party to a designated investment contract shall
not constitute carrying on insurance business, and a designated
investment contract shall not constitute a contract of insurance,
for any purposes.

(5) For the avoidance of doubt, a designated investment
contract shall not constitute a bet for the purposes of the Betting
Act 1975.

(6) The Minister may by order amend the definition of
designated investment contract in subsection (1), if, after
consulting the Insurance Advisory Committee, he considers it
necessary to do so; and any such order shall be subject to the
negative resolution procedure."

(2) In section 8A of the Insurance Act 1978, in subsection (2)(c)
(principal representative to report failure to comply with a condition
specified in a direction under section 56), after "section 56" there shall be
inserted "or section 57A".

Amends Companies Act 1981
3 In sections 129(1)(e) and 143(e) of the Companies Act 1981
(business which may be carried on in Bermuda by exempted and permit
companies), in sub-paragraph (iii) after the word "securities" there shall
in each place be inserted "or investments".