BVI regulator issues new rules and standards for insurance companies
On 7 April 2021, the BVI Financial Services Commission (FSC) issued new rules and standards of business for BVI insurance companies in the form of a brand new Regulatory (Insurance Code of Conduct) Code 2021 (theInsurance Code) and insurance-specific amendments to the FSC’s generic Regulatory Code 2009 (RC09). The changes are relevant to both insurance underwriters as well as insurance intermediaries such as brokers, managers and agents.
Both pieces of legislation are due to come into force on 6 July 2021. A few of the key highlights are below.
The Insurance Code
The Insurance Code is an entirely new code for the industry, focussing on conduct of business issues, and to an extent supplements rules previously contained in the FSC’s generic RC09.
- The Insurance Code is divided into three parts:
- Part I deals with general conduct principles relating to honesty, integrity, transparency and good faith.
- Part II deals with rules of market conduct for insurers and insurance intermediaries.
- Part III deals with rules of market conduct for loss adjusters.
- The text sets out the information that is to be provided by an insurer or an insurance intermediary to a customer prior to entering into an insurance contract.
- It establishes that a written document (in effect a statutory contract) is to be provided by an insurer or an insurance intermediary to a customer after entering into an insurance contract.
- It creates rules relating to fair advertisements and promotions and professional competence.
- Insurers and insurance intermediaries will need to comply with confidentiality requirements in relation to customers’ personal information which is obtained in the course of contractual, pre-contractual and post-contractual dealings.
- Claims are to be processed in a prompt and fair manner.
- Where a complaint is received it shall be promptly considered and dealt with.
- Policies surrounding any conflict of interests should be implemented.
Amendments to the RC09
Separately to the Insurance Code, the Regulatory (Amendment) Code 2021 has also been issued by the FSC and mandates that licensed insurers now have a requirement to maintain records in relation to claims handling.
In light of the above, it will be important for all insurers or insurance intermediaries active in the BVI market to consider their existing policies and contractual arrangements in light of these important changes.