In its role as regulator of Bermuda's financial services sector, including insurance companies, the Bermuda Monetary Authority (BMA) has recently released a revised Insurance Code of Conduct (Revised Code).
The Revised Code is effective as of 31 August 2022, but provides for a period time for insurers to ensure they are fully compliant (see below for more detail). The Revised Code follows extensive consultation with industry stakeholders and the changes are aimed to further develop a conduct of business framework by applying appropriate customer protection measures to address emerging prudential issues and ensure Bermuda's regulatory framework remains aligned with international standards.
The key areas of change in the Revised Code include governance, outsourcing, business continuity, and disaster recovery and risk management.
The BMA will allow the following transition periods from today's issue date to become compliant 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 become compliant with the new provisions of the Revised Code's section 8; and
b) A period of 12 months to become compliant with the new provisions/amendments of all the other sections of the Revised Code (i.e., excludes the provisions of section 8 as outlined in ‘a' above).
Section 8 of the Revised Code relates to the conduct of business, including integrity, conflicts of interest, and a number of additional sections that apply to insurers writing domestic retail business.
When reviewing the Revised Code, insurers should take note that, among the many changes, Section 4.1 – The Board – has been amended to make reference to and distinguish independent non-executive directors from non-executive and executive directors. Insurers should consider carefully consider the right mix of these classifications of directors through the proportionality principle.
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