Insurance Code of Conduct for Bermuda Insurers

David J. Doyle, Kent Smith • Posted 17/01/2011 • Under Articles

The Insurance Code of Conduct (Code), which was originally scheduled to come into effect on December 31, 2010, will now come into force on July 1, 2011. Insurers should now be taking such steps as may be necessary to ensure compliance with the Code and it is anticipated that the Bermuda Monetary Authority (BMA) will issue guidance to the market in that regard in March 2011.

After July 1, 2011, the BMA will include evaluation of insurers' compliance with the Code as part of its regular prudential supervision and on-site reviews of insurance companies. Failure to comply with these requirements will be a factor to be taken into account by the BMA in determining whether an insurer is conducting its business in a sound and prudent manner under the Act.

The Code is broadly consistent with previously published BMA Guidance Notes. As a member of the International Association of Insurance Supervisors (IAIS), the BMA developed the Code taking into account core principles developed by the IAIS. The Code does not set forth definitive rules of procedure and conduct applicable to all insurers but rather contains general statements on the duties and standards to be complied with by all insurers registered under the Insurance Act 1978 (Act).