Bermudan Regulator To Expand Oversight Of Insurance Sector
by Amanda Banks, Lowtax.net, London
28 March, 2014
The Bermuda Monetary Authority (BMA) has announced that it is considering regulating insurance services offered by so-called 'friendly societies' in Bermuda.
The BMA issued a statement on March 20, 2014, noting that property, home, automobile, and motorcycle insurance polices are being sold by a friendly society in Bermuda to persons who are, or become members of the society. The Authority has advised that these policies offered by an entity that is registered under the Friendly Societies Act of 1868 are not yet regulated by the Authority. Accordingly these societies do not have to comply with solvency or liquidity requirements that apply to domestic insurers under the Insurance Act.
Craig Swan, Managing Director of Supervision at the Authority, said: "The Authority's view is that no financial services product should be sold to the community without appropriate regulatory oversight. Accordingly, we will undertake a review of the matter and anticipate advising the Government in the near future on this issue."
"A key part of this evaluation will be getting the views of relevant stakeholders in the Bermuda market," he said. "It will be very important to have such input as we update policy and legislation related to friendly societies providing insurance services."
Swan said a review will begin shortly, but cautioned, in the interim, that: "Members or potential members of a friendly society which is offering insurance policies may not be aware that such entities are outside the scope of existing insurance legislation and regulation in Bermuda and, thus, are not currently regulated for that purpose by the Authority. This means that no regulatory body can offer assurances about capital adequacy, or the ability to pay policyholder claims if and when they become due."
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