Bermuda MPs delay decision on Insurance Act repeal

By added on 16/12/2014

A decision on whether or not to pass a Bill to repeal parts of the Insurance Act 1978 regarding trade unions and friendly societies has been delayed due to confusion in the House of Assembly over the Yea or Nay vote, reports the Royal Gazette.

Deputy speaker Suzann Roberts-Holshouser declared “the yeas have it” with regards to an objection to the Bill, but confusion ensued and she then made a call for names, which the Opposition vociferously rejected.

The matter could not be resolved in the House so it was decided to “rise and report progress” at a later date.

The Bermuda Monetary Authority Amendment Act 2014 presented by Finance Minister Bob Richards sought to repeal a section of the Insurance Act which would require certain financial services, which the Opposition said would include friendly societies and trade unions, to be registered by the Authority under the act prior to conducting insurance business on the Island.

It would affect those organisations registered under the Friendly Societies Act 1868 and the Trade Union Act 1965.

Such sectors had previously been exempt if they met certain criteria but Mr Richards said that in light of an oversight by the authority that saw the Bentley Friendly Society selling insurance policies that were not registered with them.

At the time the BMA said: “Accordingly, it does not have to comply with solvency or liquidity requirements that apply to domestic insurers under the act.”

Mr Richards said the amendment was to protect policy holders.

“These are unique times in Bermuda history,” the Minister told the House as he introduced the legislation during Friday’s session.

“That means that many financial services are dealing with economic conditions that we have never seen before.”

The Bill would allow the Bermuda Monetary Authority (BMA) to increase its fees for certain services next year by three per cent: fees regulated by the BMA’s own 1965 act, the Insurance Undertakings Act 1967, the Investment Business Act 2003, and the Investments Funds Act 2006.

“Although there are a few exceptions, generally three per cent reflects a sound balance between the need for additional financial resources, and the ability of regulated firms to absorb it,” Mr Richards said.

He said the BMA was now of a view that “since it has established a stable regime, now would be a reasonable time to amend its fees”.

Minister Richards said: “The legislation did not seek to outlaw friendly societies or effect … if in future a legitimate friendly society decides to offer insurance of some description this legislation says they have to be put on the same playing field as other insurance companies as it pertains to the act.”

The amendment would see added fees and regulations for the trade unions and friendly societies wanting to provide mutual insurance.