Insurance Amendment Act 2002
INSURANCE AMENDMENT ACT 2002

1989 Revision 1

BERMUDA
2002 : 29

INSURANCE AMENDMENT ACT 2002

[Date of Assent: 27 August 2002]

[Operative Date: 14 October 2002]

WHEREAS it is expedient to make provision for fees payable
under this Act to be paid to the Authority; for obtaining information
from insurers, insurance managers and intermediaries; for extending the
application of section 56; and for connected purposes:

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. (1) This Act may be cited as the Insurance Amendment Act
2002.

(2) This Act shall come into operation on such day as the
Minister may appoint by notice published in the Gazette; and the
Minister may appoint different days for the commencement of different
provisions.

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

Section 14 of principal Act amended
3. Section 14 of the principal Act is amended

(a) by deleting "Government" where it occurs in proviso (b)
to subsection (2) and in subsection (3), and substituting
in each case "Authority".

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(b) by inserting the following subsection after subsection (3)


"(4) Notwithstanding section 4(1) of the Government
Fees Act 1965, all fees payable under this Act shall be
paid to the Authority.".

Sections 29A, 29B, 29C, 29D, 29E and 29F inserted in Part VI of
principal Act
4. The principal Act is amended by inserting the following new
sections in Part VI after section 29 —

"Power to obtain information and reports
29A (1) The Authority may by notice in writing served on a
registered person —

(a) require the registered person to provide the
Authority (or such person acting on behalf of the
Authority as may be specified in the notice), at
such time or times or at such intervals or in
respect of such period or periods as may be so
specified, with such information as the Authority
may reasonably require with respect to matters
that are likely to be material to the performance,
in relation to the registered person, of its
functions under this Act;

(b) require the registered person to provide the
Authority with copies of published and
unpublished reports in respect of the registered
person as specified in the notice, containing
information on, or on any aspect of, any matter
about which the Authority has required or could
require the registered person to provide
information under paragraph (a).

(2) The Authority may in respect of a registered person
appoint a professional person to prepare a report on, or on any
aspect of, any matter about which the Authority has required or
could require the registered person to provide information under
subsection (1)(a).

(3) In making such an appointment the Authority shall
ensure that the appointed person has relevant and appropriate
experience having regard to the nature and scope of the business
being carried out by the registered person.

(4) The person appointed to make a report under
subsection (2) shall forthwith give written notice to the Authority

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of any fact or matter of which he becomes aware which indicates
to him

(a) that any term or condition of registration of the
registered person is not or has not been fulfilled,
or may not be or may not have been fulfilled, in
respect of the registered person; and

(b) that the matters are likely to be material to the
performance, in relation to the registered
person, of the Authority's functions under this
Act.

(5) In this section and in sections 29B, 29C, 29D and 29E,
"registered person" means a person registered under this Act.

Power to require production of documents
29B (1) The Authority may —

(a) by notice in writing served on a registered person
require such person to produce, within such time
and at such place as may be specified in the notice,
such document or documents of such description
as may be so specified;

(b) authorise an officer, servant or agent of the
Authority, on producing evidence of his authority,
to require any such registered person to provide
him forthwith with such information, or to produce
to him forthwith such documents, as he may
specify;

being such information or documents as the Authority may
reasonably require for the performance of its functions under
this Act.

(2) Where, by virtue of subsection (1), the Authority or any
officer, servant or agent of the Authority has power to require the
production of any documents from a registered person, the
Authority or that officer, servant or agent shall have the like
power to require the production of those documents from any
person who appears to be in possession of them; but where any
person from whom such production is required claims a lien on
documents produced by him, the production shall be without
prejudice to the lien.

(3) The power under this section to require a registered
person or other person to produce any documents includes
power —

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(a) if the documents are produced, to take copies of
them or extracts from them and to require that
registered person or other person, or any other
person who is a present or past director, other
officer or principal representative of , the registered
person in question, to provide an explanation of any
of them; and

(b) if the documents are not produced, to require the
person who was required to produce them to state,
to the best of his knowledge and belief, where they
are.

(4) If it appears to the Authority to be desirable in the
interests of the clients of a registered person to do so, it may
also exercise the powers conferred by section 29A and
subsection (1) of this section in relation to any company which
is or has at any relevant time been —

(a) a parent company, subsidiary company or related
company of that registered person;

(b) a subsidiary company of a parent company of that
registered person;

(c) a parent company of a subsidiary company of that
registered person; or

(d) a company in the case of which a shareholder
controller of that registered person, either alone or
with any associate or associates, holds 50 per cent
or more of the shares or is entitled to exercise, or
control the exercise of more than 50 per cent of the
voting power at a general meeting.

(5) Any person who without reasonable excuse fails to
comply with a requirement imposed on him under this section
shall be guilty of an offence and liable on summary conviction to
a fine of $10,000 or to imprisonment for a term of six months or
to both.

(6) 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.

(7) In this section

"chief executive" in relation to a registered person,
means a person who, either alone or jointly with one
or more persons, is responsible under the immediate

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authority of the directors or partners for the conduct
of the business of the registered person;

"director" means any person who occupies the position
of director by whatever name called;

"officer" includes director, secretary, chief executive or
senior executive by whatever name called;

"related company " has the meaning given in section
29D;

"senior executive" in relation to a registered person,
means a person (other than a chief executive) who,
under the immediate authority of a director, partner
or chief executive of the registered person 

(a) exercises managerial functions; or

(b) is responsible for maintaining accounts
or other records of the registered person;

"shareholder controller" has the meaning given in
section 29E;

"subsidiary company" has the same meaning as in
section 86 of the Companies Act 1981.

Communication with Authority
29C.(1) No duty to which a person appointed to make a report
under section 29A(2) may be subject shall be regarded as
contravened by reason of his communicating in good faith to the
Authority, whether or not in response to a request made by the
Authority, any information on a matter to which this section
applies and which is relevant to any function of the Authority
under this Act.

(2) In relation to a person appointed to make a report under
section 29A(2) this section applies to any matter of which he
becomes aware in his capacity as the person making the report
and which

(a) relates to the business or affairs of the registered
person in relation to which his report is made or
any associated company of that registered
person;

(b) if by virtue of section 29B(4) the report relates to
an associated company of a registered person, to
the business or affairs of that company.

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(3) In this section "associated company", in relation to a
registered person, means any such company as is mentioned in
section 29B(4).

Meaning of related company
29D (1) A related company in relation to a registered person or
the parent company of a registered person, means a company
(other than a subsidiary company) in which the registered
person or parent company holds a qualifying capital interest.

(2) A qualifying capital interest means an interest in
relevant shares of the company which the registered person or
parent company holds on a long term basis for the purpose of
securing a contribution to its own activities by the exercise of
control or influence arising from that interest.

(3) A holding of 20 per cent or more of the nominal value of
the relevant shares of a company shall be presumed to be a
qualifying capital interest unless the contrary is shown.

(4) Relevant shares means shares comprised in the equity
share capital of the company of a class carrying rights to vote in
all circumstances at general meetings of the company.

(5) Equity share capital means the issued share capital of a
company excluding any part of that capital which, neither as
respects dividends nor as respects capital, carries any right to
participate beyond a specified amount in a distribution.

Meaning of shareholder controller
29E (1) A person is a shareholder controller in relation to a
registered person if, either alone or with any associate or
associates

(a) he holds 50 per cent or more of the shares in the
registered person or another company of which
it is a subsidiary company;

(b) he is entitled to exercise or control the exercise
of 50 per cent or more of the voting power at any
general meeting of the registered person or
another company of which it is such a
subsidiary; or

(c) he is able to exercise a significant influence over
the management of the registered person or
another company of which it is such a
subsidiary by virtue of 

(i) a holding of shares in; or

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(ii) an entitlement to exercise, or control the
exercise of, the voting power at any
general meeting of;

the registered person, or as the case may be, the
other company concerned.

(2) In this section "associate" in relation to a person entitled
to exercise or control the exercise of voting power in relation to,
or holding shares in, a company, means

(a) if that person is an individual 

(i) the spouse, child, step-child or parent of
that person;

(ii) the trustees of any settlement under
which that person has a life interest in
possession;

(iii) any company of which that person is a
director;

(iv) any person who is an employee or
partner of that person;

(b) if that person is a company 

(i) any director of that company;

(ii) any subsidiary of that company;

(iii) any director or employee of any such
subsidiary company;

(c) if that person has with any other person an
agreement or arrangement with respect to the
acquisition, holding or disposal of shares or
other interests in that company or under which
they undertake to act together in exercising their
voting power in relation to it, that other person.

(3) For the purpose of subsection (2), "settlement"
includes any disposition or arrangement under which
property is held in trust.

Authority's statement of principles
29F. (1) The Authority shall as soon as practicable after the
coming into force of this section, publish in such manner as it
thinks fit a statement of principles in accordance with which it is
acting or proposing to act in exercising its power to obtain
information, reports and to require production of documents.

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(2) If the Authority makes a material change to the principles it
shall publish a statement of the change or revised statement of
principles in the same manner as it published the statement under
subsection (1).".

Section 31 of principal Act repealed
5. Section 31 of the principal Act is repealed.

Section 52C of principal Act amended
6. Section 52C of the principal Act is amended in subsection (2) by
inserting "or" after "section 52".

Section 56 of principal Act amended
7. Section 56 of the principal Act is amended in subsection (5)(b) by
deleting "15 to 18" and substituting "15 to 18, 18B".