Addressing a recent BFSB-sponsored Captive Insurance Seminar, Lennox McCartney, Superintendent of the Insurance Commission of The Bahamas (ICB) said the Regulator is committed to “doing our part to help develop a competitive and vibrant international insurance industry in The Bahamas.”
Speaking during Lunch at the Seminar, Mr. McCartney provided an update of ICB developments over the past year. He pointed out that a mid-year 2009 “Insuring Success” Report commissioned by BFSB and the Government identified the Office of the Register of Insurance Companies (ORIC), the predecessor of the Commission, as one of the key stakeholders that would determine the success of the development of the Captive and international insurance industry in The Bahamas. Specifically, the consultant’s report highlighted 3 key commitments necessary of the insurance regulator, namely :
- To support the development of the industry;
- Become an independent Insurance Commission;
- Recruit regulatory staff with international insurance experience.
He said, “Many times consultants’ reports are commissioned and presented with great ideas and enthusiasm and then left on the shelves to gather dust. I could safely say that that is not the case with the recommendations made by this report as far as the insurance regulator is concerned here in The Bahamas.”
Insurance Commission of The Bahamas
On 2 July 2009, the Commission was established when the domestic insurance Act was brought into force. This was closely followed by the bringing to force of the External Insurance Act on the 19 August 2009. This latter act, the Superintendent said, is a completely rewritten, modern and flexible legislation developed in close consultations with the industry and international experts. The regulations for the External insurance and domestic legislations were brought into force in May and June 2010, respectively, bringing the legislation fully into operation.
The Commission is a body corporate having perpetual succession and has responsibility for the following:
- supervising compliance with the provisions of the Insurance Act and the External Insurance Act;
- maintaining surveillance over the insurance markets;
- promoting and encouraging sound and prudent insurance management and business practices;
- ensuring compliance with the Financial Transactions Reporting Act and other anti-money laundering legislation;
- advising the Minister responsible for insurance maters regarding the insurance markets; and
- for such other things as may be necessary to promote the interests of policyholders or are prescribed in the insurance legislation or other laws.
The Commission is overseen by a board of Commissioners, and has the power and authority, in addition to the carrying out of its day to day supervisory activities, to make regulations and issue orders for the purpose of giving effect to the provisions of the Insurance Acts. Regulations made by the Commission do not require debate and passage by Parliament.
According to Superintendent McCartney, the new regulatory authority was established with an effective and appropriate mandate that substantially meets international standards; with the authority to carry out its mandate; with the independence to carry out that mandate; and, importantly, with adequate funding. With these key ingredients, the Commission is able to develop its office to fulfil the goals to assist with the development of the International Insurance industry.
Enhanced Operational Structure
The ICB made an immediate assessment of the technical capacity of the office and proceeded to recruit a number of additional staff members, and in order to address on a short term basis specific gaps in the competencies and expertise needed to meet its obligations, engaged a number of consultants. Recently engaged was Arvind Baghel, a seasoned insurance regulator (from the Canadian Regulator OSFI) who now heads the ICB’s Supervision Department.
In early 2010 the Commission entered into a partnership agreement with the Toronto Leadership Centre for the purpose of enhancing the Commissions supervisory methodology. The Centre will provide two experts on insurance and risk-based supervision to be available to the Commission on both an on-site and off-site basis for up to 10 weeks per annum and to work with the Commission and its staff to establish realistic supervisory objectives, design a program to ensure the development of methodologies necessary to achieve these objectives including the provision of onsite and offsite training and support. As part of this program the Commission has agreed, at a later date, to be the subject of a case study design to assist other countries who are in the process of developing robust regulatory regimes and practices.
The Commission has engaged, as well, a number of international consultants to provide actuarial services to review the actuarial liabilities of the life and health licensees. Reinsurance consultants were also engaged to review the reinsurance programmes of the general insurance companies. In addition, insurance supervisory consultants were engaged to complete the review the Commission’s compliance with international standards and to make recommendations on the organization and structure of the office. The Commission used the results of these consultations to chart the way forward in 2010.
Mr. McCartney noted that the industry is always concerned about the amount of time the application process would take. “I assure you that the Commission is very committed that we meet our stated goal of a 30 day turn-around time for restricted captive applications, once all of the required documents are in hand. We have committed to this and we are pretty much on target.”
The Commission currently is canvassing the industry for representatives to serve on its Industry Advisory Committee. This Committee will have direct and continuous dialogue with the Commission on matters of concern to the industry. The Superintendent says the international insurance sector is very dynamic, and the external insurance legislation must also be dynamic. “We look forward to the work of this Committee as the Commission strives to keep our legislation and operations modern and efficient.”