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In its role as regulator of Bermuda’s financial services sector, including insurance companies, the Bermuda Monetary Authority (BMA) recently published a Revised Code of Conduct for Insurance Companies.
The revised Code comes into effect on August 31, 2022, but provides a period during which insurers must ensure they are fully compliant (see below for more details). The revised Code follows extensive consultation with industry stakeholders and the changes aim to further develop a framework for doing business, applying appropriate customer protections to address emerging regulatory issues and ensuring that Bermuda’s regulatory framework remains aligned with international standards.
Key areas of change in the revised Code include governance, outsourcing, business continuity, and disaster recovery and risk management.
The BMA will grant the following transitional periods from today’s issue date in order to comply with the new provisions of the Code for insurers registered under Section 4 of the Insurance Act 1978:
a) a period of six months to comply with the new provisions of Section 8 of the revised Code; and
b) A period of 12 months to become compliant with the new provisions/amendments of all other sections of the revised Code (ie excluding the provisions of Section 8 as described in “a” above).
Section 8 of the revised Code relates to business conduct, including integrity, conflicts of interest and a number of additional sections applicable to insurers doing domestic retail business.
In reviewing the revised Code, insurers should note that among the many changes, Section 4.1 – The Board – has been amended to refer to independent non-executive directors and to distinguish them from non-executive directors and executive directors. Insurers should carefully consider the right mix of these classifications of directors in accordance with the principle of proportionality.
The content of this article is intended to provide a general guide to the topic. In relation to your specific circumstances, you should seek advice from a specialist.
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