Insurance Amendment Act 2001

Link to law: http://www.bermudalaws.bm/Laws/Annual%20Laws/2001/Acts/Insurance%20Amendment%20Act%202001.pdf

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now
Insurance Amendment Act 2001.pdf
INSURANCE AMENDMENT ACT 2001



BERMUDA

2001 : 27

INSURANCE AMENDMENT ACT 2001

[Date of Assent: 13 August 2001]

[Operative Date: 1 October 2001]


WHEREAS it is expedient to make provision for the transfer of
responsibility for the regulation of insurance business to the Supervisor
of Insurance; for the preservation of the confidentiality of information
received by the Supervisor; for the disclosure of such information; for
assisting foreign regulators; 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 Insurance Amendment Act 2001
and shall come into operation on such day or days as the Minister may
appoint by notice published in the Gazette; and the Minister may by
such notice appoint different days for different provisions.

Interpretation
2. In this Act "the principal Act" means the Insurance Act 1978.

Principal Act amended by substituting "Supervisor" for "Minister"
3. The Schedule (which deletes references to "Minister" and
substitutes "Supervisor" in the specified provisions) has effect.


1




INSURANCE AMENDMENT ACT 2001


2



Principal Act, etc. amended by substituting "Supervisor" for
"Registrar"
4. The principal Act and any statutory instruments made
thereunder are amended by deleting "Registrar" wherever it occurs in the
Act or instruments and substituting in each case "Supervisor".

Section 1 of principal Act amended
5. Section 1(1) of the principal Act is amended ⎯

(a) by deleting the definition of "Registrar"; and

(b) by inserting in its appropriate alphabetical position the
following definition⎯

"Supervisor" means the person referred to in section
1A(1);".

Section 1A inserted in principal Act
6. The principal Act is amended by inserting the following section
after section 1⎯

"Supervisor of Insurance
1A (1) There shall be a Supervisor of Insurance whose office
shall be a public office.

(2) The Supervisor shall have such functions as are
conferred on him by or under this Act.

(3) The Registrar of Companies shall perform the functions
of the Supervisor under this Act and any regulations and orders
made thereunder.".

Section 2 of principal Act amended
7. Section 2 of the principal Act is amended by inserting the
following subsection after subsection (4)—

"(5) The Insurance Advisory Committee may advise the Minister
on any matter relating to the development of the insurance
industry in Bermuda."

Section 13 of principal Act amended
8. Section 13 of the principal Act is amended by deleting
subsection (1) and substituting the following⎯

"(1) Where the Supervisor determines to register any person
under section 4 or 10, he shall cause the prescribed particulars
relating to that person to be entered in a register to be

INSURANCE AMENDMENT ACT 2001


3



maintained by him for the purpose (in this Act referred to as "the
Register").".

Section 20 of principal Act amended
9. Section 20 of the principal Act is amended in subsection (1) by
inserting "acting on the advice of the Supervisor" after "The Minister".

Section 35 of principal Act amended
10. Section 35(3) of the principal Act is amended by deleting "direct
the Registrar to".

Section 40 of principal Act amended
11. Section 40 of the principal Act is amended in subsection (1) by
inserting "acting on the advice of the Supervisor" after "The Minister".

Section 51A to 51 D inserted in principal Act
12. The principal Act is amended by inserting the following sections
after section 51⎯

"Powers exercisable to assist foreign regulatory authorities

Request for assistance by foreign regulatory authority
51A (1) The powers conferred by section 51B are exercisable by
the Supervisor for the purpose of assisting a foreign regulatory
authority which has requested assistance in connection with
inquiries being carried out by it or on its behalf.

(2) A "foreign regulatory authority" means the authority
which, in a country or territory outside Bermuda, exercises
regulatory functions corresponding to the regulatory functions of
the Supervisor under this Act.

(3) The Supervisor shall not exercise the powers conferred
by section 51B unless he is satisfied that the assistance
requested by the foreign regulatory authority is for the purposes
of its regulatory functions.

(4) An authority's "regulatory functions" means any function
falling within subsection (2).

(5) In deciding whether to exercise those powers the
Supervisor shall take into account, in particular⎯

(a) whether corresponding assistance would be
given in that country or territory to the
Supervisor;

(b) whether the inquiries relate to the possible
breach of a law, or other requirement, which has
no close parallel in Bermuda or involves the


INSURANCE AMENDMENT ACT 2001


4



assertion of a jurisdiction not recognised by
Bermuda;

(c) the nature and seriousness of the matter to
which the inquiries relate, the importance to the
inquiries of the information sought in Bermuda
and whether the assistance could be obtained by
other means; and

(d) whether it is otherwise appropriate in the public
interest to give the assistance sought.

(6) The Supervisor may decline to exercise the powers
conferred by section 51B unless the foreign regulatory authority
undertakes to make such contributions towards the costs of
their exercise as the Supervisor considers appropriate.

(7) The Supervisor shall decline to exercise the powers
conferred by section 51B(1)(c) unless he is satisfied that any
statement that may be given in the exercise of that power could
not be used against the maker of the statement in evidence in
proceedings under the law of the jurisdiction of the foreign
regulatory authority.

Power to require information
51B (1) Where in accordance with section 51A the Supervisor is
satisfied that assistance should be provided pursuant to a
request by a foreign regulatory authority and that the request is
in relation to information in Bermuda pertaining to the business
of a person registered under this Act ('the registered person')
which is in its possession or under its control , the Supervisor
may by notice in writing served on the registered person ⎯

(a) require the registered person to furnish him with
such information as the Supervisor may require
with respect to any matter relevant to the
inquiries to which the request relates;

(b) require the registered person to produce to him
such document or documents of such
description as he may specify;

(c) require an officer, servant or agent of the
registered person to attend before him at a
specified time and place and answer any
questions or otherwise furnish any information
with respect to any matter relevant to the
inquiries; or

INSURANCE AMENDMENT ACT 2001


5



(d) require the registered person to otherwise give
him such assistance in connection with those
inquiries as the registered person may
reasonably be able to give.

(2) Where documents are produced pursuant to this section
the Supervisor may take copies from them.

(3) Nothing in this section shall require the disclosure or
production by a person of information or documents which he
would be entitled to refuse to disclose or produce on the grounds
of legal professional privilege in proceedings in Bermuda.

(4) A statement by a person in compliance with a
requirement imposed by subsection (1)(c) shall not be used in
evidence against him.

(5) Where a person claims a lien on a document, its
production under this section is without prejudice to his lien.

(6) In this section "documents" includes information
recorded in any form; and, in relation to information recorded
otherwise than in legible form, the power to require its
production includes power to require the production of a copy of
it in legible form.

Exercise of powers by officer
51C (1) The Supervisor may authorise any of his officers or any
other competent person to exercise on his behalf any of the
powers conferred by section 51B.

(2) No such authority shall be granted except for the
purpose of investigating⎯

(a) the affairs, or any aspect of the affairs, of a person
specified by the Supervisor; or

(b) a subject matter specified by the Supervisor;

being a person who, or a subject matter which, is the subject of
the inquiries being carried out by or on behalf of the foreign
regulatory authority.

(3) No person shall be bound to comply with a requirement
imposed by a person exercising powers by virtue of an authority
granted under this section unless he has, if required, produced
evidence of his authority.

(4) Where the Supervisor authorises a person other than
one of his officers to exercise powers by virtue of this section,
that person shall make a report to the Supervisor in such
manner as he may require on the exercise of those powers and
the results of exercising them.


INSURANCE AMENDMENT ACT 2001


6



Penalty for failure to comply with requirement
51D (1) A person who without reasonable excuse fails to comply
with a requirement imposed on him under section 51B commits
an offence and is liable on summary conviction to a fine of $5000
or to imprisonment for six months or to both.

(2) A person who in purported compliance with any such
requirement furnishes information which he knows to be false or
misleading in a material particular, or recklessly furnishes
information which is false or misleading in a material particular
commits an offence and is liable on summary conviction to a fine
of $25,000 or to imprisonment for two years or to both.

Section 52 of principal Act repealed and replaced
13. Section 52 of the principal Act is repealed and is replaced by the
following sections⎯

"Restriction on disclosure of information

Restricted information
52 (1) Except as provided by sections 52A, 52B and 52C⎯

(a) no person who under or for the purposes of this
Act receives information relating to the business
or other affairs of any person; and

(b) no person who obtains such information directly
or indirectly from a person who has received it
as aforesaid,

shall disclose the information without the consent of the person
to whom it relates and (if different) the person from whom it was
received as aforesaid.

(2) This section does not apply to information which at the
time of the disclosure is or has already been made available to
the public from other sources or to information in the form of a
summary or collection of information so framed as not to enable
information relating to any particular person to be ascertained
from it.

(3) Any person who discloses information in contravention
of this section commits an offence and is liable ⎯

(a) on summary conviction to a fine of $50,000 or to
imprisonment for two years or to both;

(b) on conviction on indictment to a fine of
$100,000 or to imprisonment for five years or to
both.

INSURANCE AMENDMENT ACT 2001


7



Disclosure for facilitating the discharge of functions of the
Supervisor
52A (1) Section 52 does not preclude the disclosure of
information in any case in which disclosure is for the purpose of
enabling or assisting the Supervisor to discharge his functions
under this Act.

(2) Without prejudice to the generality of subsection (1),
section 52 does not preclude the disclosure of information by the
Supervisor to the auditor of the registered person if it appears to
the Supervisor that disclosing the information would enable or
assist the Supervisor to discharge his functions or would
otherwise be in the interests of the policy-holders.

Disclosure for facilitating the discharge of functions by other
authorities
52B (1) Section 52 does not preclude the disclosure of
information to the Minister or other authority in Bermuda in any
case in which the disclosure is for the purpose of enabling or
assisting the Minister or other authority to discharge his
regulatory functions.

(2) Section 52 does not preclude the disclosure of
information for the purpose of enabling or assisting an authority
in a country or territory outside Bermuda to exercise functions
corresponding to the functions of the Supervisor under this Act.

(3) Subsection (2) does not apply in relation to disclosure to
an authority other than the foreign regulatory authority which
has requested the information pursuant to section 51A, of
information obtained pursuant to the exercise of powers under
section 51B unless the Supervisor has taken into account the
matters specified in section 51A(5).

(4) Subsection (2) does not apply in relation to disclosure to
an authority unless the Supervisor is satisfied that the authority
is subject to restriction on further disclosure at least equivalent
to those imposed by sections 52, 52A and this section.

(5) Section 52 does not preclude the disclosure of
information⎯

(a) for the purpose of enabling or assisting an
inspector appointed under section 30 to carry
out an investigation;

(b) with a view to the institution of, or otherwise for
the purposes of, any criminal proceedings,
whether under this Act or any other Act;


INSURANCE AMENDMENT ACT 2001


8



(c) in connection with any other proceedings arising
out of this Act.

(6) Section 52 does not preclude the disclosure by the
Supervisor to the Director of Public Prosecutions or a police
officer not below the rank of inspector of information obtained
pursuant to section 30 or of information in the possession of the
Supervisor as to any suspected contravention in relation to
which the powers conferred by that section is exercisable.

(7) Information which is disclosed to a person in pursuance
of this section shall not be used otherwise then for the purpose
mentioned in this section.

Information supplied to the Supervisor by relevant overseas
authority
52C (1) Section 52 applies to information which has been
supplied to the Supervisor for the purposes of any relevant
functions by the relevant supervisory authority in a country or
territory outside Bermuda.

(2) Information supplied to the Supervisor as mentioned in
subsection (1) shall not be disclosed except as provided by
section 52⎯

(a) for the purpose of enabling or assisting the
Supervisor to discharge his functions under this
Act; or

(b) with a view to the institution of, or otherwise for
the purpose of, criminal proceedings, whether
under this Act or any other Act.

(3) In this section⎯

"relevant functions" in relation to the Supervisor
means his functions under this Act;

"relevant supervisory authority" means the
authority discharging in that country or territory
functions corresponding to those of the
Supervisor under this Act. ".

Section 53 of principal Act amended
14. Section 53 of the principal Act is amended in subsection (1) by
inserting "acting on the advice of the Supervisor" after "The Minister".

Section 57A of principal Act amended
15. Section 57A(6) of the principal Act is amended by deleting
"Insurance Advisory Committee" and substituting "Supervisor".

INSURANCE AMENDMENT ACT 2001


9



SCHEDULE (section 3)
The principal Act is amended by deleting "Minister" wherever it occurs in
the provisions referred to in Table A and in the statutory instruments
specified in Table B to this Schedule and substituting in each case
"Supervisor" .



TABLE A
Provisions in principal Act

Section 1(1), in the definitions of
"actuary"; "association of
underwriters"; "auditor" and
"excepted long-term business"

Sections 18C(1) and (2)

Sections 1(4) Sections 22(1) and (3)

Sections 2(1) and (4) Sections 25(3) and (4)

Section 3(1) Section 26(2)

Sections 4(1), (2), (3), (4), (5), (6)
and (7)

Section 27(2)

Sections 4A (1), (2), (3) and (4) Section 30(1)

Sections 4C (1) and (2) Section 31 and the section
heading

Section 4F(2) Section 31A(1)

Section 5 and the section heading Section 31B(4)

Section 6(1) Sections 31C(1), (2), (3) and (4)

Sections 7(2) and (3) Sections 32(1), (2), (3), (4), (5), (6),
(7) and (8)

Sections 8(1B), (3A) and (6) Sections 35(1) and (3)

Sections 8A(1) and (2) Sections 41(1) and (2)

Section 9(1) Section 42(1)

Sections 10(1), (2) and the section
heading

Section 43(4)

Section 11 and the section
heading

Section 45(1)

Section 12 Section 47(2)

Section 15(3) Sections 56(1), (4) and the section
heading


INSURANCE AMENDMENT ACT 2001


10



Sections 16(2) and (3) Sections 57A(1), (2) and (3)

Section 18A(5)





Table B
Specified statutory instruments

Insurance Accounts Regulations
1980

Non-Resident Insurance
Undertakings (Long-Term
Insurers) Investment in Bermuda
Order 1985

Insurance Returns and Solvency
Regulations 1980







INSURANCE AMENDMENT ACT 2001


i