The Government of the Bahamas has indicated that it recognises the importance of the financial services industry to the Bahamas. It has also been recognised that the financial services industry, particularly where that is classed as off-shore, is very competitive and that perhaps others have recently been able to take better advantage of the benefits available. The current administration in the Bahamas has expressed the desire to meet the challenges of the modern day international financial services market place.
The overall responsibility for this falls to the Ministry of Finance and ultimately of course the
Minster of Finance – the Prime Minister of The Bahamas.
So far as insurance is concerned it is the Office of the Registrar of Insurance Companies (ORIC) which is responsible for the prudential regulation of all insurance activity in or through The Bahamas. As such it is concerned with the ongoing monitoring and control of insurers, agents, brokers, salesmen, underwriting managers and of course external insurers, which predominantly means captive insurance operations.
ORIC is of course only one of a number of financial services regulators in The Bahamas and although there is an increasingly close degree of cooperation amongst those regulators, there is now the real desire to streamline financial services regulation and ultimately reduce the number of regulators to perhaps a single regulator or two regulators for the entire financial services sector to the ultimate benefit of all involved. ORIC will be included within the proposed consolidated regulatory regime. However, in the meantime ORIC is already undergoing changes to become an insurance “Commission” responsible for the oversight of all insurance activities in The Bahamas. Attention has also been focussed upon the modernisation of the existing domestic Insurance Act and the External Insurance Act, which date back to 1969 and 1983 respectively.
A new domestic Insurance Act has already been passed by Parliament and new regulations are being finalised. In addition a draft for a new External Insurance Act is now well advanced.
Inevitably, the proposed new External Act will be more comprehensive than its predecessor. To an extent this is unavoidable given modern international regulatory pressures.
It is intended that new act will provide greater transparency as regards the licensing requirements to be satisfied by external insurers including, in relation to ownership and control, in respect of the “fit and proper person” regime, and the independent review of business plans and financial projections.
It is also intended that there will be greater transparency as regards any licensing decisions with reasons being given for any refusal to grant a licence. Any licence issued may be subject to specific initial and / or ongoing conditions but will be subject to certain general conditions as regards the notification of events which will require the prior approval of the proposed new Commission. Such events will include mergers, transfers of business, change of name business name or trade mark, the appointment of new directors or officers and engaging in a class of business other than that specified in the original application and for which approval was given.
It is intended that the new act will also provide greater clarity in respect of procedures for revocation or suspension of licences and provide an appeals process in respect of the same. There will also be provisions in respect of resident representative requirements.
The provisions of the 1996 amendment to the current act regarding asset protection will be retained and augmented, as will the all important segregation of funds provisions.
The new act will, in addition to providing for the registration of those falling under the description of “underwriting manager” in the existing act, also extend to persons providing external insurance management services, including brokers.
Finally, the new act will bestow upon the proposed new Commission certain powers specific to external insurance business as well as more general supervisory powers.