Effective 1 September 2022, the Bermuda Monetary Authority (the "BMA") issued a revised Insurance Code of Conduct (the "Code of Conduct") which, among other things, expanded the duties, requirements, standards and principles which are to be observed by all insurers. In particular, we wish to remind everyone that all insurers must comply with section 8.1 of the Code of Conduct by 1 March 2023.
Section 8.1 of the Code of Conduct provides that an insurer shall conduct its business with integrity and, in particular, that by 1 March 2023, all Bermuda registered insurers shall have clearly documented and established policies and procedures to manage or avoid situations in which a conflict of interest may arise between the insurer's business and that of its clients. Section 8.1 also provides that all insurers should make sure that all material interests in a transaction are disclosed to the relevant parties prior to the company entering into such transaction and that adequate records of all conflicts of interest are kept.
The remainder of section 8 of the Code of Conduct also requires compliance by 1 March 2023. However, it only applies to insurers which are writing domestic retail business and expands on the BMA's expectations as they relate to such insurers having due regard for the interests of policyholders by ensuring, among other things, that:
- there is fair treatment of all policyholders;
- the insurer is always acting with due care, skill and diligence;
- insurer's employees are appropriately qualified and experienced;
- policies implemented by insurers address the fair treatment of policyholders throughout the product lifecycle;
- the products which are being offered by insurers to policyholders are suitable for such policyholders;
- all vulnerable policyholders are identified, and appropriate facilities and access to information and services are provided to such vulnerable policyholders; and
- appropriate policies, procedures and/or programmes are established and complied with in respect of sales practices, claims handling and disputes, policyholder complaint and error handling, policyholder responsibilities and policyholder awareness, to name a few.
Resources and How We Can Help
You can find a copy of the final form of the Insurance Code of Conduct on the BMA website. You can also find red lines of the revised Code of Conduct on the BMA's website for the August 2022 draft and for the December 2021 draft. Please note that the revised Code of Conduct was developed through a series of consultation papers and stakeholder feedback, with drafts published sporadically. As such, the August 2022 draft of the Code of Conduct is redlined against the December 2021 draft, and the December 2021 draft is redlined against the July 2015 Insurance Code of Conduct.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.