The Tribune

By YOURI KEMP

Tribune Business

Reporter

ykemp@tribunemedia.net

REFORMS that will combine existing laws governing the insurance industry into one comprehensive Act are close to completion and release for public consultation, regulators said yesterday.

Carl Culmer Jr, the Insurance Commission’s manager of policies and practices, told the Bahamas Institute of Chartered Accountants (BICA) week-long seminars that consultation is “on the horizon” over the amalgamation of the Insurance Act 2005 and External Insurance Act 2009 into one piece of legislation.

“The amalgamation of the Acts remains an ongoing exercise that is approaching the stage where a public consultation will be on the horizon,” he said. “As you can imagine, this is an engaging process to ensure that the resulting amended Act continues to maintain its competitive edge in terms of the Commission exercising its powers and facilitating the conduct of insurance business that considers all of its stakeholders, such as the policyholders, insurers, intermediaries and other service providers.

“Additionally, this involves several layers of cross-referencing to ensure that the proposed amendments do not adversely impact the existing conditions in which the insurance industry currently operates ,while facilitating that delicate balance of growth and compliance with international initiatives.”

Mr Culmer indicated that combining the Insurance Act 2005 and the External Insurance Act 2009 into one law “has been a recommendation both from the FATF (Financial Action Task Force) and from reviews that occurred earlier in the Commission’s life cycle”. Marrying both laws has been a two-year project that first started in 2019, and the Insurance Commission now feels confident the reforms are almost ready for release to the industry and wider public.

The amendments include replacing the existing 3 percent tax levied on insurance premiums with a systemic risk levy, replicating recent changes unveiled for the Bahamian bank and trust companies, whose fees are to be based on the systemic risk individual institutions pose and the amount of regulation they require.

Mr Culmer added: “The removal of premium tax is a by-product of government’s most recent Budget exercise, and so previously there was a charge of 3 percent on premiums for our insurers. During the most recent Budget exercise, government has since amended that and included it in the Business License Act, and now government directly receives a Business License percentage of total turnover for insurers.

“The amendments to the Insurance Act to include the implementation of the levy are in draft and under review by the Office of the Attorney General. As it relates to policy updates in December 2021, the conduct of business guidelines took effect after several weeks of industry consultation. The purpose of the guidelines was to outline the legal requirements and professional standards in which intermediaries must conduct insurance business in The Bahamas. “