Bermuda Monetary Authority Amendment (No. 2) Act 2001
BERMUDA MONETARY AUTHORITY AMENDMENT (NO 2) ACT
2001

1989 Revision 1

BERMUDA
2001 : 34

BERMUDA MONETARY AUTHORITY AMENDMENT (NO 2)
ACT 2001

[Date of Assent: 27 December 2001]

[Operative Date: 1 January 2002]

WHEREAS it is expedient to make new provision for the Board of
Directors of the Bermuda Monetary Authority, for its management, and
for connected matters.

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 and commencement
1. This Act may be cited as the Bermuda Monetary Authority
Amendment (No 2) Act 2001 and shall come into operation on such day
as the Minister may appoint by notice published in the Gazette.

Interpretation
2. In this Act the "principal Act" means the Bermuda Monetary
Authority Act 1969.

Section 1 of principal Act amended
3. Section 1 of the principal Act is amended

(a) by substituting the following for the definition of
"Chairman"

"Chairman" means the Chairman of the Board;"; and

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(b) by deleting the definition of "General Manager";

(c) by inserting the following definitions in their appropriate
alphabetical positions

""Deputy Chairman" means the Deputy Chairman of
the Board;

"non-executive member" means a member of the
Board other than the Chief Executive Officer, the
Superintendent of Banking, Trust and
Investment and the Supervisor of Insurance;

"officer" in relation to the Authority includes director
and secretary;".

Section 4 of principal Act repealed and replaced
4. Section 4 of the principal Act is repealed and replaced by the
following section

"Board of Directors
4. (1) There shall be a Board of Directors of the Authority
which shall consist of

(a) the Chief Executive Officer of the Authority, who
shall be the Chairman;

(b) four members appointed by the Minister from
persons with experience of the financial services
industry ;

(c) four members appointed by the Minister from
persons who are members of the Insurance
Advisory Committee established by the
Insurance Act 1978;

(d) the Superintendent of Banking, Trust and
Investment; and

(e) the Supervisor of Insurance.

(2) The Minister shall appoint a Deputy Chairman from the
non-executive members of the Board.

(3) Part 1 of the First Schedule shall have effect with respect
to the tenure and qualifications of office of the non-executive
members of the Board, and Part 2 of the First Schedule shall
have effect with respect to the procedure for meetings of the
Board.".

BERMUDA MONETARY AUTHORITY AMENDMENT (NO 2) ACT
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Section 4A of principal Act repealed and replaced
5. Section 4A of the principal Act is repealed and replaced by the
following section

"Functions of the Board
4A The functions of the Board shall be to manage the affairs
and business of the Authority, and to determine the policy
objectives and strategy of the Authority.".

Section 4B of principal Act repealed and replaced
6. Section 4B of the principal Act is repealed and replaced by the
following section

"Immunity from suit
4B (1) No action, suit, prosecution or other proceeding shall be
brought or instituted personally against an officer, servant or
agent of the Authority in respect of any act done bona fide in
pursuance or execution or intended execution of this Act or any
other Act and regulations made thereunder.

(2) Where any officer is exempt from liability by reason only
of subsection (1), the Authority shall be liable to the extent that it
would be if that officer were a servant or agent of the Authority.

(3) Neither the Authority nor any person who is, or is acting
as, an officer, servant or agent of the Authority is liable in
damages for anything done or omitted in the discharge or
purported discharge of the Authority's functions under this Act
or any other Act and regulations made thereunder unless it is
shown that the act or omission was in bad faith.".

Section 4C added to principal Act
7. The principal Act is amended by adding the following section
after section 4B

"Functions to be carried out by non-executive members
4C (1) The functions mentioned in subsection (2) shall be
performed by a committee of the Board consisting of all the non-
executive members of the Board.

(2) The functions mentioned in subsection (1) are

(a) keeping under review the question whether the
Authority is discharging its functions in
accordance with the policy objectives and
strategy determined by the Board;

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(b) keeping under review the question whether the
Authority's internal financial controls secure the
proper conduct of its financial affairs; and

(c) determining the remuneration and other terms
of service of the Chief Executive Officer of the
Authority, the Superintendent of Banking, Trust
and Investment and the Supervisor of
Insurance.

(3) At a meeting of the committee the quorum shall be five.

(4) The Deputy Chairman shall chair the committee.

(5) Subject to subsections (3) and (4), the committee shall
determine its own procedure.

(6) The committee may delegate any of its functions to two
or more of its members.".

Section 4D added to principal Act
8. The principal Act is amended by adding the following section
after section 4C

"Delegation of Authority's powers and duties
4D (1) The Authority may, by instrument in writing, delegate to


(a) an officer or servant of the Authority; or

(b) a committee constituted by the Board from
persons who are officers or servants of the
Authority,

any function or power vested in the Authority.

(2) A delegation under subsection (1) may —

(a) be made subject to such conditions,
qualifications and exceptions as the Authority
may prescribe in the instrument of delegation;

(b) be revoked or varied by a subsequent
instrument.

(3) The Authority may perform any function or exercise any
power notwithstanding that it has delegated it to some other
person or committee.".

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Section 4E added to principal Act
9. The principal Act is amended by adding the following section
after section 4D

"Chief Executive Officer
4E (1) There shall be a Chief Executive Officer of the Authority
appointed by the Minister from persons with experience of the
financial services industry.

(2) A person is disqualified for appointment as Chief
Executive Officer of the Authority if he is a member of either
House of the Legislature.

(3) An appointment made pursuant to subsection (1) shall
be for a term of not less than three years but not more than five
years, and may be renewed.

(4) The Minister acting after consultation with the Authority
may terminate the appointment of the Chief Executive Officer of
the Authority if he is satisfied 

(a) that he has become bankrupt, that his estate
has been sequestered or that he has made an
arrangement with or granted a trust deed for his
creditors; or

(b) that he is unable or unfit to discharge his
functions as Chief Executive Officer of the
Authority.

(5) The Chief Executive Officer of the Authority shall,
subject to the authority of the Board, administer the affairs of
the Authority, and shall have such other functions as the Board
may assign to him.".

Section 4F added to principal Act
10. The principal Act is amended by adding the following section
after section 4E

"Superintendent of Banking, Trust and Investment
4F (1) There shall be a Superintendent of Banking, Trust and
Investment appointed by the Authority.

(2) An appointment made pursuant to subsection (1) shall
not have effect until it is approved by the Minister.

(3) The Superintendent of Banking, Trust and Investment
shall perform such functions and exercise such powers of the
Authority under the Banks and Deposit Companies Act 1999,

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the Trusts (Regulation of Trust Business) Act 2001, the
Investment Business Act 1998 and such other functions relating
to financial services (other than insurance) as the Authority may
delegate to him.

(4) In performing such functions and exercising such
powers, the Superintendent of Banking, Trust and Investment
shall have regard to the Authority's policies in relation to
financial services and shall comply with such general directions
as the Board may give from time to time in respect thereof.".

Section 4G added to principal Act
11. The principal Act is amended by adding the following section
after section 4F

"Supervisor of Insurance
4G. (1) There shall be a Supervisor of Insurance appointed by
the Authority.

(2) An appointment made pursuant to subsection (1) shall
not have effect until it is approved by the Minister .

(3) The Supervisor of Insurance shall perform such
functions and exercise such powers of the Authority under the
Insurance Act 1978 as the Authority may delegate to him.

(4) In performing such functions and exercising such
powers, the Supervisor of Insurance shall have regard to the
Authority's policies in relation to financial services and shall
comply with such general directions as the Board may give from
time to time in respect thereof.".

Section 5 of principal Act repealed and replaced
12. Section 5 of the principal Act is repealed and replaced by the
following section

"Employment of officers, servants and agents
5 The Authority shall, subject to such terms and
conditions as it thinks fit, employ such officers, servants and
agents as the Authority considers necessary for the due
performance of the Authority's functions.".

Section 6 of principal Act repealed
13. Section 6 of the principal Act is repealed.

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Section 27 of principal Act amended
14. Section 27 of the principal Act is amended by repealing
subsection (1) and substituting the following subsections

" (1) The accounts of the Authority shall be audited annually
by an auditor approved by the Minister.

(1a) Upon the completion of the audit, the auditor shall
present such accounts to the Board.".

First Schedule to principal Act repealed and replaced
15. The First Schedule to the principal Act is repealed and replaced
by the following schedule

"FIRST SCHEDULE

(section 4)

BOARD OF DIRECTORS

Part 1: Tenure and qualifications of non-executive members of the
Board

Terms of Office

1. Appointment as director of the Authority shall be for a period of
not less than three years and not more than five years, except that
initially some appointments may be for shorter and different periods
so as to secure that appointments expire at different times.

2. A person appointed as director of the Authority in place of a
person who ceased to hold office before the end of the term for
which he was appointed shall be appointed for the remainder of that
person’s term of office.

3. A person appointed as director of the Authority may resign his
office by written notice to the Authority.

4. The Minister shall cause to be published in the Gazette the name
of every person appointed as director of the Authority.

Qualification for appointment

5. A person is disqualified for appointment as director of the
Authority if he is a member of either House of the Legislature or a
person serving in a government department in employment in

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respect of which remuneration is payable out of money provided by
Parliament.

6. The fact that a person has held office as director of the Authority
does not disqualify him for re-appointment to that office.

Removal from office

7. A person appointed as director of the Authority shall vacate
office if he becomes a person to whom paragraph 5 applies.

8. The Minister acting after consultation with the Authority may
remove a person from office as director of the Authority if he is

satisfied that that person
(a) has been absent from meetings of the Board for

more than three months without the consent of the
Board;

(b) has become bankrupt, that his estate has been
sequestered or that he has made an arrangement
with or granted a trust deed for his creditors; or

(c) is unable or unfit to discharge his functions as a
member.

Remuneration

9. A director of the Authority shall be entitled to be paid by the
Authority such remuneration and allowances as the Authority may
determine with the approval of the Minister.

Part 2: Procedure for meetings of the Board

Powers

10.The Board may act notwithstanding the existence of one or more
vacancies in its members or a defect in the appointment of a
member.

11.The Board may appoint such committees, as it thinks fit.

Meetings

12.(1) The Board shall meet as often as necessary or expedient for
the due performance of its functions.

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(2) The Chairman (or in his absence the Deputy Chairman)
may summon a meeting at any time on giving such notice as in his
judgment the circumstances may require.

13.(1) At a meeting of the Board, the proceedings shall be
regulated as follows.

(2) The quorum shall be six of whom a majority shall be non-
executive members.

(3) The Chairman or the Deputy Chairman shall chair meetings
of the Board.

(4) If the Chairman and the Deputy Chairman are absent from
a meeting of the Board, the members present at the meeting shall
nominate one of their number to chair the meeting.

(5) If a member of the Board has any direct or indirect interest
in any dealing or business with the Authority

(a) he shall disclose his interest to the Board at the
time of the dealing or business being negotiated or
transacted; and

(b) he shall have no vote in relation to the dealing or
business, unless the Board has resolved that the
interest does not give rise to a conflict of interest.

(6) A member of the Board shall have no vote in relation to any
question arising which touches or concerns him .

(7) Subject to subparagraphs (2) to (6), the Board shall
determine its own procedure.".