i e AT 16 of 2008 INSURANCE ACT 2008

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1 i e AT 16 of 2008 INSURANCE ACT 2008

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3 Insurane At 2008 Index i e INSURANCE ACT 2008 Index Setion Page PART 1 REGULATORY OBJECTIVES 9 1 Regulatory objetives [Repealed]... 9 PART 2 ADMINISTRATION 9 3 The Isle of Man Finanial Servies Authority [Repealed] PART 3 AUTHORISATION OF INSURERS 10 5 Authorised insurers Appliation for authorisation Cirumstanes in whih authorisation will not be granted Authorisation Alteration of onditions of existing authorisations Withdrawal of authorisation in respet of new business A Surrender of authorisation by insurer Statement of reasons PART 4 REQUIREMENTS FOR AUTHORISED INSURERS 12 CHAPTER I 12 Solveny, aounts and audit 12 Capital requirements] Solveny margins Capital requirements A No dividend in breah of SCR B Duty to inform Authority in relation to risks to solveny C Consequenes of breahing MCR D Consequenes of breahing SCR Consequenes of not meeting solveny margin AT 16 of 2008 Page 3

4 Index Insurane At 2008 [Note: The following version of setion 13 is in operation only in respet of any longterm business arried on by an insurer Consequenes of not omplying with apital requirements Aounts Auditor A Auditors to report to Authority CHAPTER II 17 General requirements that apply to all authorised insurers Restrition of business to insurane Management A Corporate governane CHAPTER III 18 Requirements that apply to all insurers arrying on long-term business Atuary [Repealed] [Repealed] CHAPTER IV 20 Transfer of insurane business Transfer of insurane business PART 5 FOREIGN INSURERS Foreign insurers PART 6 INSURANCE MANAGERS AND INSURANCE INTERMEDIARIES 21 CHAPTER I 21 Insurane Managers Insurane managers CHAPTER II 21 Insurane Intermediaries Insurane intermediaries CHAPTER III 22 Common provisions Registration under this Part Canellation or restrition A Canellation of registration of registered insurane manager or insurane intermediary on request Winding up of insurane managers and insurane intermediaries PART 6A REQUIREMENTS FOR REGISTERED INSURANCE MANAGERS AND INSURANCE INTERMEDIARIES 24 27A Aounts Page 4 AT 16 of 2008

5 Insurane At 2008 Index 27B Auditor C Auditors to report to Authority D Corporate governane PART 7 CONNECTED PERSONS Persons to whom this Part applies Conneted persons A Prohibitions B Prohibition proedure C Prohibitions: variation and revoation D List of prohibitions E Warning noties Notie of essation PART 8 SUPERVISION 32 CHAPTER I 32 The powers of the Authority Loation of assets Winding up of insurers Residual power to impose requirements Publiation of information and advie Publi statements CHAPTER II 34 Inspetion and investigation Inspetion and investigation CHAPTER III 34 Civil penalties Civil penalties PART 9 SPECIAL REMEDIES Injuntions Restitution orders A Appointment of reeiver B Appointment of business manager Ations for damages Appliation of setions 39 and PART 10 SUPPLEMENTARY 39 CHAPTER I 39 General Continuation and disontinuation of ertain insurers Compensation shemes Reasons for deisions AT 16 of 2008 Page 5

6 Index Insurane At Appeals to the Finanial Servie Tribunal Restritions on dislosure of information Fees Registers A Insurane ontrats not to be regarded as gaming or wagering ontrats [Repealed] Regulations Guidane Notes CHAPTER II 44 Offenes and penalties False or misleading statements, et Offenes CHAPTER III 47 Final provisions Interpretation Finanial provisions Amendments Repeals Savings and transitional provisions Short title and ommenement SCHEDULE 1 53 SCHEDULE 2 53 TRANSFER OF LONG-TERM BUSINESS 53 SCHEDULE 3 57 INSOLVENCY AND WINDING UP 57 Winding up on petition of Authority 57 SCHEDULE 4 61 CONTINUATION AND DISCONTINUATION OF INSURANCE COMPANIES 61 SCHEDULE 5 63 INSPECTION AND INVESTIGATION 63 SCHEDULE 6 70 RESTRICTIONS ON DISCLOSURE OF INFORMATION 70 SCHEDULE 7 75 MATTERS IN RESPECT OF WHICH REGULATIONS MAY BE MADE 75 Insurers, insurane managers and insurane intermediaries 75 Page 6 AT 16 of 2008

7 Insurane At 2008 Index Insurane managers and insurane intermediaries only 78 SCHEDULE 8 80 AMENDMENT OF ENACTMENTS 80 Life Assurane (Compensation of Poliyholders) Regulations 1991 (G.C. 48/91) 80 SCHEDULE 9 82 REPEAL OF ENACTMENTS 82 SCHEDULE SAVING AND TRANSITIONAL PROVISIONS 83 ENDNOTES 85 TABLE OF LEGISLATION HISTORY 85 TABLE OF RENUMBERED PROVISIONS 85 TABLE OF ENDNOTE REFERENCES 85 AT 16 of 2008 Page 7

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9 Insurane At 2008 Setion 1 i e INSURANCE ACT 2008 Reeived Royal Assent: 21 Otober 2008 Announed to Tynwald: 21 Otober 2008 Commened: 1 Deember 2008 AN ACT to re-enat with amendments ertain enatments relating to the regulation of persons arrying on insurane business and the regulation of insurane managers and insurane intermediaries; and for onneted purposes. PART 1 REGULATORY OBJECTIVES 1 Regulatory objetives Setions 1(2) (the Isle of Man Finanial Servies Authority) and 2 (exerise of funtions to be ompatible with the regulatory objetives) of the Finanial Servies At 2008 shall apply in respet of the Authority s funtions under this At. 1 2 [Repealed] 2 PART 2 ADMINISTRATION 3 The Isle of Man Finanial Servies Authority (1) The Authority shall exerise the funtions onferred on it by this At. (2) The Authority is harged with the general administration of this At and the Retirement Benefits Shemes At AT 16 of 2008 Page 9

10 Setion 4 Insurane At [Repealed] 4 PART 3 AUTHORISATION OF INSURERS 5 Authorised insurers [1986/24/3(1) and (3)] (1) No person, other than a person mentioned in subsetion (2) may arry on, or hold itself out as arrying on, insurane business in or from the Island. 5 (2) Insurane business may be arried on in or from the Island by an authorised insurer; by a person who is the holder of a permit issued under setion 22 (foreign insurers); () (d) (e) by a person who is exempted by regulations from the requirement to be an authorised insurer or to hold a permit issued under setion 22; by a person who arries on a lass of insurane business whih is exempted by regulations from the requirement to be arried on by a person speified in this setion; or by the Government or by a person who is not an authorised insurer but who is ating on behalf of the Government. 6 Appliation for authorisation [1986/24/4 and 5] (1) Appliations for authorisation to arry on an insurane business shall be made in writing to the Authority. 6 (2) An appliant shall be a ompany or a person or lass of persons speified in regulations. (3) An appliant, or if agreed in writing by the Authority, another person on behalf of the appliant, must provide the Authority with suh douments and information as may be required by the Authority. 7 7 Cirumstanes in whih authorisation will not be granted [1986/24/5 to (d)] The Authority shall not authorise an appliant under setion 8 if the appliant does not satisfy the Authority that (i) (ii) the appliant; the ontroller, diretors and any hief exeutive of the appliant; and Page 10 AT 16 of 2008

11 Insurane At 2008 Setion 8 (iii) in the ase of an appliant to arry on long-term insurane business, any atuary to the appliant proposed in satisfation of the requirements of setion 18, are fit and proper persons; 8 does not satisfy the Authority that it has (ba) () (i) (ii) an appropriate level of management in the Island; or appointed a registered insurane manager in the Island, with adequate knowledge and experiene of the insurane business arried on; 9 does not give any undertaking whih may reasonably be required by the Authority; or 10 does not omply with the riteria ontained in diretions issued by the Authority Authorisation [1986/24/6(1)] In relation to every appliation for authorisation, the Authority shall authorise the appliant in writing to arry on, subjet to suh onditions as the Authority may impose, an insurane business; or 13 refuse the appliation Alteration of onditions of existing authorisations [1986/24/6(2)] Where an authorisation has been granted under setion 8 the Authority may, at any time make suh authorisation subjet to onditions; vary or revoke any ondition Withdrawal of authorisation in respet of new business 1986/24/9(1) and (2) (1) The Authority may at any time withdraw any authorisation, but only to the extent that the authorised insurer onerned shall ease to be authorised to effet new ontrats of insurane. 16 (2) Withdrawal of authorisation under this setion shall not prevent an insurer from effeting a ontrat of insurane in pursuane of a term of a subsisting ontrat of insurane. AT 16 of 2008 Page 11

12 Setion 11 Insurane At A Surrender of authorisation by insurer Where an authorised insurer proposes to surrender its authorisation the Authority may require the insurer to take suh ation as appears to the Authority to be neessary to seure that any insurane business arried on by that insurer is disontinued and wound up Statement of reasons [1986/24/6(3), (4) & (6) and 9(3) & (5)] (1) The Authority shall give written notie to the authorised insurer of any deision to exerise the powers onferred by setion 9 or 10(1) and suh notie shall ontain a statement of reasons for the deision. 18 (2) Exept where the Authority is satisfied that urgent ation is neessary, a notie under subsetion (1) shall be served on the insurer not less than 8 weeks before suh powers are exerised. 19 (3) Subsetion (2) shall not apply if the powers are exerised with the onsent of the insurer onerned. (4) [Repealed] 20 (5) When the Authority exerises any powers under setion 9 or 10(1) the Authority may require the insurer to give notie of suh exerise in suh manner and to suh persons as the Authority may require. 21 PART 4 REQUIREMENTS FOR AUTHORISED INSURERS CHAPTER I Solveny, aounts and audit [Note: The following ross-heading is in operation only in respet of any long-term business arried on by an insurer. Capital requirements 22 ] 12 Solveny margins [1986/24/17(1)] Every authorised insurer shall maintain a margin of solveny of suh amount as may be presribed by or determined in aordane with regulations. [Note: The following version of setion 12 is in operation only in respet of any long-term business arried on by an insurer. Page 12 AT 16 of 2008

13 Insurane At 2008 Setion Capital requirements (1) Every authorised insurer must establish and maintain the following apital requirements a minimum apital requirement ( MCR ); and a solveny apital requirement ( SCR ), of suh amounts as may be presribed by or determined in aordane with regulations made for the purposes of this setion. (2) Regulations may make provision in relation to the assets to be held by an insurer for the purpose of meeting the requirements mentioned in subsetion (1) ( eligible apital resoures ). 23 ] [Note: The following setions 12A to 12D are in operation only in respet of any long-term business arried on by an insurer. 12A No dividend in breah of SCR (1) No authorised insurer may delare or pay a dividend or make any distribution to any person other than a poliyholder where the eligible apital resoures of the authorised insurer have fallen below the SCR; or the amount of the dividend or distribution would be suh as to ause the insurer s eligible apital resoures to fall below the SCR. (2) Regulations may make provision in relation to what onstitutes a dividend or a distribution for the purposes of this setion B Duty to inform Authority in relation to risks to solveny Where the eligible apital resoures of an authorised insurer fall below (i) (ii) the MCR; or the SCR; or the insurer beomes aware of a substantial risk that within the next 3 months its eligible apital resoures will fall below the MCR or the SCR, the insurer must notify the Authority in writing of this as soon as is pratiable C Consequenes of breahing MCR (1) Where the eligible apital resoures of an authorised insurer fall below the MCR the Authority may require the insurer to submit a sheme in aordane with setion 13; or AT 16 of 2008 Page 13

14 Setion 13 Insurane At 2008 present a petition for the winding up of the insurer under paragraph 4 of Shedule 3. (2) For the purposes of subsetion (1) where the eligible apital resoures of an authorised insurer fall below the MCR the insurer is deemed to be unable to pay its debts for the purposes of setion 162 or 307 of the Companies At 1931 (as the ontext requires) D Consequenes of breahing SCR Where the eligible apital resoures of an authorised insurer fall below the SCR the Authority may require the insurer to submit a sheme in aordane with setion 13; or withdraw the insurer s authorisation in aordane with setion ] 13 Consequenes of not meeting solveny margin [1986/24/17(2) to (6)] (1) If the margin of solveny of an authorised insurer falls below suh amount as may be presribed by or determined in aordane with regulations, the insurer shall at the request of the Authority submit to the Authority a short-term finanial sheme. 28 (2) A sheme under subsetion (1) shall be submitted within 30 days of the request of the Authority, or suh longer period as the Authority may permit. 29 (3) If the Authority onsiders the sheme (or the sheme as previously modified) inadequate the insurer shall propose modifiations to it to the Authority. 30 (4) Where an insurer is required to maintain separate margins in respet of its long-term business and its other insurane business, subsetion (1) shall have effet as if any referene to the margin of solveny of the insurer is a referene to the aggregate of those margins. (5) A sheme submitted under subsetion (1) may inlude proposals for the appointment of a speial manager aeptable to the Authority; or 31 the disontinuane, either in whole or in part, of the insurer s business. (6) An insurer shall give effet to any sheme aepted by the Authority. 32 (7) If an authorised insurer is unable or fails to submit a sheme whih is aeptable to the Authority, the insurer shall be deemed to be unable to pay its debts for the purposes of setion 162 or 307 of the Companies At 1931 (as the ontext requires). 33 Page 14 AT 16 of 2008

15 Insurane At 2008 Setion 13 [Note: The following version of setion 13 is in operation only in respet of any long-term business arried on by an insurer. 13 Consequenes of not omplying with apital requirements 34 [1986/24/17(2) to (6)] (1) Where the Authority so requires in aordane with setion 12C(1) or 12D, the insurer must submit to the Authority a short-term finanial sheme for the purpose of enabling the insurer to omply with the MCR or the SCR as the ase may be. 35 (2) A sheme under subsetion (1) shall be submitted within 30 days (where its submission has been required by virtue of setion 12C(1)); and within 60 days (where its submission has been required by virtue of setion 12D. 36 (3) If the Authority onsiders the sheme (or the sheme as previously modified) inadequate the insurer shall propose modifiations to it to the Authority. 37 (4) [Repealed] 38 (5) A sheme submitted under subsetion (1) may inlude proposals for the appointment of a speial manager aeptable to the Authority; or 39 the disontinuane, either in whole or in part, of the insurer s business. (6) An insurer must give effet to the sheme in the ase of a sheme submitted by virtue of a requirement made under setion 12C(1), within 3 months from the date of submission of the sheme; and subjet to subsetion (6A), in the ase of a sheme submitted by virtue of a requirement made under setion 12D, within 6 months from the date of its submission. 40 (6A) The Authority may extend the period mentioned in subsetion (6) to 9 months where the Authority thinks fit. 41 (6B) The insurer must submit reports to the Authority in relation to the implementation of any proposals set out in the sheme at suh intervals as the Authority may require. 42 (6C) The Authority may give diretions to the insurer in relation to the time within whih modifiations to a sheme must be proposed by the insurer under subsetion (3); and for the implementation of a sheme, and it is the duty of the insurer to omply with a diretion under this subsetion. 43 AT 16 of 2008 Page 15

16 Setion 14 Insurane At 2008 (7) If an authorised insurer is unable or fails to submit a sheme whih is aeptable to the Authority or fails to give effet to that sheme in aordane with diretions given under subsetion (6C) in the ase of a sheme submitted under this setion by virtue of a requirement made under setion 12C(1), the insurer is deemed to be unable to pay its debts for the purposes of setion 162 or 307 of the Companies At 1931 (as the ontext requires) and the Authority may apply to wind up the insurer under paragraph 4 of Shedule 3; and in the ase of a sheme submitted under this setion by virtue of a requirement made under setion 12D the Authority may withdraw the insurer s authorisation in aordane with setion ] 14 Aounts [1986/24/12] (1) Unless regulations made in aordane with subsetion (2) provide for an alternative system of aounting, the provisions of the Partnership At 1909, the Companies Ats 1931 to 2004, the Limited Liability Companies At 1996 and the Companies At 2006 relating to aounts shall have effet in their appliation to authorised insurers subjet to this At and to regulations made under this At. (2) Regulations may provide for authorised insurers to be subjet to a system of aounting that shall be adopted in plae of that provided for in subsetion (1) and for this purpose may require ompliane with standards or the adoption of praties reommended by a body speified in the regulations, and may in partiular require ompliane with standards or the adoption of praties reommended by that body from time to time (that is, after as well as before the making of the regulations). (3) A opy of the audited annual aounts of every authorised insurer shall be produed to the Authority within 21 days after the date of the meeting at whih the aounts were approved by the board of diretors and in any event within 6 months after the lose of the year to whih they relate or at any other suh time or times as the Authority may require. 45 (4) Suh statements, reports, ertifiates and information as may be required by regulations made under this At, or required by any other enatment to be annexed or attahed to the annual aounts for any purpose shall be produed to the Authority at the same time as the annual aounts are submitted. 46 (5) The Authority may exempt in writing an insurer speified in the exemption from any provision ontained in regulations made under this At relating to aounts. 47 Page 16 AT 16 of 2008

17 Insurane At 2008 Setion Auditor [1986/24/14] (1) Every authorised insurer shall appoint a person as auditor to the insurer in aordane with setion 29. (2) An authorised insurer shall give notie in writing to the Authority immediately it reeives notie of any resolution intended to be moved at the insurer s annual general meeting to appoint as auditor a person other than the retiring auditor or providing expressly that a retiring auditor shall not be appointed. 48 (3) Where, for any reason, the appointment of an auditor omes to an end the insurer and the auditor shall, not more than 14 days after the termination, eah give notie in writing to the Authority of the reasons for the termination A Auditors to report to Authority (1) If the auditor appointed under setion 15 beomes aware of any matter whih is suh as to give the auditor reasonable ause to believe that the authorised insurer who appointed the auditor may be in ontravention of (i) (ii) this At; or any diretion or requirement imposed under this At; and the matter is likely to be of material signifiane in relation to the Authority s funtions under this At, the auditor must report suh matter in writing to the Authority. (2) No statutory or other duty to whih an auditor may be subjet is ontravened by reason of the auditor ommuniating in good faith to the Authority, whether or not in response to a request made by the Authority, any information or opinion under subsetion (1). (3) This setion applies only to any matter of whih the auditor beomes aware in the apaity of auditor and whih relates to the business or affairs of the person who appointed the auditor. 50 CHAPTER II General requirements that apply to all authorised insurers 16 Restrition of business to insurane [1986/24/18] An authorised insurer shall not arry on any ativities, in the Island or elsewhere, otherwise than in onnetion with or for the purpose of its insurane business. AT 16 of 2008 Page 17

18 Setion 17 Insurane At Management [1986/24/19] Every authorised insurer shall have an appropriate level of management in the Island; or appoint a registered insurane manager in the Island, with adequate knowledge and experiene of the insurane business arried on A Corporate governane Every authorised insurer must establish, implement and maintain an appropriate and effetive orporate governane framework in respet of the insurer, whih ensures that the insurer is soundly and prudently managed (whih inludes being soundly and prudently overseen by its board of diretors or, if it has no board of diretors, its equivalent governing body). 52 CHAPTER III Requirements that apply to all insurers arrying on long-term business 18 Atuary [1986/24/13] (1) Every authorised insurer arrying on long-term business shall appoint as atuary to the insurer a person who is qualified in aordane with subsetion (2). (2) A person shall be qualified for appointment under subsetion (1) if that person (i) [Repealed] 53 (ii) is a Fellow of the Institute and Faulty of Atuaries; or 54 (iii) satisfies the Authority that suh person has some other atuarial qualifiation of similar standing; and 55 the Authority is satisfied that suh person has experiene that fits suh person to undertake the funtions of an atuary under this At. 56 (3) No appointment shall be made under subsetion (1) unless a written notie ontaining suh partiulars as may be determined by the Authority is served on the Authority by the insurer onerned not less than 28 days before the appointment or suh shorter period as the Authority may agree in writing. 57 (4) If it appears to the Authority that a person is not a fit and proper person to be appointed as atuary under subsetion (1), the Authority may diret Page 18 AT 16 of 2008

19 Insurane At 2008 Setion 18 that suh person shall not, without the written onsent of the Authority, be appointed as atuary. 58 (5) If it appears to the Authority that an appointed atuary of an authorised insurer arrying on long-term business is not a fit and proper person to ontinue as suh, the Authority may diret that suh person shall not, without the written onsent of the Authority, ontinue as appointed atuary. 59 (6) The Authority shall give written notie to the person onerned of any deision to make a diretion under this setion. 60 (7) Exept where the Authority is satisfied that urgent ation is neessary, the notie under subsetion (6) shall be served on the person not less than 28 days before the date on whih the diretion is to take effet. 61 (8) Any onsent by the Authority under subsetions (4) or (5) may be () given subjet to onditions; varied from time to time; or revoked at any time, and the Authority shall give written notie to the person onerned of any deision to exerise the powers onferred by paragraph, or (). 62 (9) No person shall aept or ontinue in any appointment referred to in subsetion (4) or (5) in ontravention of a diretion under this setion. (10) It is the duty of an authorised insurer arrying on long-term business to take are not to appoint or ontinue the appointment of a person in ontravention of a diretion under this setion. (11) Whenever an appointment under subsetion (1) omes to an end the insurer shall () within 14 days of the termination of the appointment, notify the Authority in writing of the termination and the reason for the termination; 63 satisfy the Authority that appropriate arrangements have been made to over any absene of an appointed atuary; and 64 as soon as pratiable following the termination, make a new appointment under subsetion (1). (12) An insurer whih fails to omply with subsetion (11) shall not effet any new long-term insurane ontrats until a new appointment is made. (13) Whenever an appointment under subsetion (1) omes to an end the person easing to be the appointed atuary shall serve a written notie on the Authority ontaining suh partiulars as may be presribed within 14 days of suh essation. 65 AT 16 of 2008 Page 19

20 Setion 19 Insurane At 2008 (14) The Authority may appoint a person qualified in aordane with subsetion (2) as atuary to an insurer who has failed to make an appointment under subsetion (11)() and suh appointment shall be deemed to have been made by the insurer. 66 (15) Regulations may provide for the provisions of this setion to have effet subjet to any exeption, adaptation or modifiation speified in the regulations in relation to authorised insurers who arry on business other than long-term business [Repealed] [Repealed] 69 CHAPTER IV Transfer of insurane business 21 Transfer of insurane business [1986/24/16] (1) Shedule 2 (transfer of long-term business) shall have effet. (2) Regulations may provide for the provisions of Shedule 2 to have effet in relation to insurane business whih is not long-term business subjet to the exeptions, adaptations and modifiations set out in the regulations. 70 PART 5 FOREIGN INSURERS 22 Foreign insurers [1986/24/25(1)] (1) Where the Authority, upon appliation by any person, is satisfied that the person is arrying on or has arried on any lass of insurane business in a ountry other than the Island in aordane with the laws of that ountry, the Authority may issue a permit to that person. 71 (2) Setions 6(3), 7, 8, 9, 10, 10A, 11 and 17 shall have effet, with the neessary modifiations, in relation to appliants for permits, permits, and persons who are the holders of permits issued under this setion as they apply to appliants for authorisation, authorisations and authorised insurers. 72 (2A) Setion 16 has effet in relation to persons who are the holders of permits issued under this setion as it applies to authorised insurers but with the omission of the words or elsewhere,. 73 Page 20 AT 16 of 2008

21 Insurane At 2008 Setion 23 (3) Regulations may diret that any provision of this At or any regulations made under this At shall apply to persons who are the holders of permits issued under this setion, subjet to suh exeptions, adaptations and modifiations as may be speified. PART 6 INSURANCE MANAGERS AND INSURANCE INTERMEDIARIES CHAPTER I Insurane Managers 23 Insurane managers [1986/24/27(1), (1A) and (5)] (1) No person may, in the ourse of a business arried on in or from the Island, at as or hold itself to be an insurane manager for, or in relation to, an insurer, unless that person is registered in the register of insurane managers; or exempted from registration by regulations. 74 (2) A registered insurane manager shall not arry on any ativities, in the Island or elsewhere otherwise than in onnetion with or for the purpose of that person s business as an insurane manager; unless the ativity is an ativity presribed by regulations. (3) Where a person arries on a business whih in any respet is or in the opinion of the Authority appears to be of a similar harater to the business arried on by an insurane manager, that person upon a delaration made by the Authority in writing shall be subjet to the provisions of this setion and shall be deemed to be ating as an insurane manager. 75 CHAPTER II Insurane Intermediaries 24 Insurane intermediaries [1996/4/1(1)] No person may, in the ourse of a business arried on in or from the Island, at as or hold itself out to be an insurane intermediary in respet of the effeting or arrying out of ontrats of insurane whih are not investments within the meaning of the Finanial Servies At 2008 unless that person is AT 16 of 2008 Page 21

22 Setion 25 Insurane At 2008 registered in the register of insurane intermediaries; or exempted from registration by regulations. 76 CHAPTER III Common provisions 25 Registration under this Part [1996/4/2;1986/24/27(2) & (4);1996/4/1(7)] (1) Appliations for registration under this Part shall be made in writing to the Authority. 77 (2) An appliant for registration under this Part, or, if agreed in writing by the Authority, another person on behalf of the appliant, shall provide suh douments and information as may be required by the Authority. 78 (3) The Authority shall not register an appliant unless the Authority is satisfied that the appliant is a fit and proper person; (aa) the appliant is a body orporate; 79 () (a) its ontroller, diretors and hief exeutive (if any) are fit and proper persons; 80 the appliant has an appropriate level of management in the Island with adequate knowledge and experiene of the appliant s business; 81 the appliant has given any undertaking in relation to its business whih may be required by the Authority; and 82 (d) the appliant (i) (ii) has effeted a poliy of professional indemnity insurane in a presribed form indemnifying the appliant; or 83 where the appliation is for registration as an insurane manager and the appliant is a ompany whih is to at only as insurane manager for assoiate ompanies, is otherwise indemnified by an assoiate ompany, to suh sum, in suh manner, in respet of suh matters, and valid for suh minimum period as may be presribed. 84 (4) The Authority may refuse to register any appliant for registration if the Authority thinks it proper to do so. 85 (5) The Authority may at any time make the ontinued registration of a registered insurane manager or registered insurane intermediary subjet to onditions; Page 22 AT 16 of 2008

23 Insurane At 2008 Setion 26 vary or revoke any onditions imposed. 86 (6) No ontrat shall be void or unenforeable, and no right of ation in ivil proeedings in respet of any loss shall arise, by reason only of the failure of a person to be a registered insurane intermediary under this At. 26 Canellation or restrition [1996/4/4; 1986/24/27(4); 1996/4/2(4)] (1) The Authority may at any time () (d) anel the registration of a registered insurane manager or a registered insurane intermediary; where a lass of insurane intermediaries is exempted from registration under this At, anel the exemption so far as it applies to a partiular person; diret a registered insurane manager not to provide management servies to insurers to whom it was not providing management servies before the diretion was made; or diret a registered insurane intermediary not to at as insurane intermediary in respet of ontrats of insurane whih are effeted following the diretion. 87 (2) The Authority shall give to the manager or intermediary onerned written notie of intention to anel the registration or exemption or to make a diretion (as the ase may be), and suh notie shall inlude a statement of reasons for the proposed anellation or diretion. 88 (3) Exept where the Authority is satisfied that urgent ation is neessary, a notie under subsetion (2) shall be served on the manager or intermediary onerned not less than 8 weeks before the date on whih the registration or exemption is to be anelled or the diretion is to be made. 89 (4) Subsetion (3) shall not apply where the manager or intermediary onsents to the anellation or making of the diretion. (5) [Repealed] 90 (6) Where a registration or exemption has been anelled or a diretion has been made under this setion, the manager or intermediary onerned shall, if required by the Authority, give notie of the anellation or diretion in suh manner and to suh persons as the Authority may diret. 91 (7) [Repealed] 92 AT 16 of 2008 Page 23

24 Setion 27 Insurane At A Canellation of registration of registered insurane manager or insurane intermediary on request Where a registered insurane manager or insurane intermediary proposes to anel its registration the Authority may require the insurane manager or insurane intermediary to take suh ation as appears to the Authority to be neessary to seure that any business in respet of whih that person is registered under this Part is disontinued and wound up Winding up of insurane managers and insurane intermediaries [1996/4/10A] (1) The Authority may present a petition for the winding up of any insurane manager or insurane intermediary that is a ompany in aordane with the Companies Ats 1931 to 2004, the Companies At 2006 or the Limited Liability Companies At 1996, as appropriate. 94 (2) A petition under subsetion (1) may be presented on the ground () (d) (e) that the ompany is unable to pay its debts within the meaning of setion 162 or setion 307 of the Companies At 1931 (as the ontext requires); that the ompany has failed to satisfy an obligation to whih it is or was subjet by virtue of this At; that the ompany has arried on in business otherwise than in aordane with this Part; that the ompany, being under a statutory obligation with respet to the keeping of aounting reords, has failed to satisfy that obligation or to produe reords kept in satisfation of that obligation and that the Authority is unable to asertain its finanial position; or 95 that it is expedient in the publi interest that the ompany should be wound up. (3) In any proeedings to wind up a ompany on the ground mentioned in subsetion (2), evidene that a ompany was insolvent at the lose of the period to whih the aounts of the ompany last produed under setion 27A(3) relate is to be regarded as evidene that the ompany ontinues to be unable to pay its debts unless the ontrary is proved. 96 PART 6A REQUIREMENTS FOR REGISTERED INSURANCE MANAGERS AND INSURANCE INTERMEDIARIES 97 27A Aounts (1) Unless regulations made in aordane with subsetion (2) provide for an alternative system of aounting, the provisions of the Partnership At Page 24 AT 16 of 2008

25 Insurane At 2008 Setion , the Companies Ats 1931 to 2004, the Limited Liability Companies At 1996 and the Companies At 2006 relating to aounts shall have effet in their appliation to registered insurane managers and insurane intermediaries subjet to this At and to regulations made under this At. (2) Regulations may provide for registered insurane managers and insurane intermediaries to be subjet to a system of aounting that shall be adopted in plae of that provided for in subsetion (1) and for this purpose may require ompliane with standards or the adoption of praties reommended by a body speified in the regulations, and may in partiular require ompliane with standards or the adoption of praties reommended by that body from time to time (that is, after as well as before the making of the regulations). (3) A opy of the audited annual aounts of every registered insurane manager and insurane intermediary shall be produed to the Authority within 21 days after the date of the meeting at whih the aounts were approved by the board of diretors and in any event within 6 months after the lose of the year to whih they relate or at suh other time or times as the Authority may require. (4) Suh statements, reports, ertifiates and information as may be required by regulations made under this At, or required by any other enatment to be annexed or attahed to the annual aounts for any purpose shall be produed to the Authority at the same time as the annual aounts are submitted. (5) The Authority may exempt in writing a registered insurane manager or insurane intermediary speified in the exemption from any provision ontained in regulations made under this At relating to aounts B Auditor (1) A person mentioned in subsetion (2) shall appoint an auditor to that person in aordane with setion 29. (2) The persons are a registered insurane manager; and a registered insurane intermediary. (3) A person mentioned in subsetion (2) shall give notie in writing to the Authority immediately it reeives notie of any resolution intended to be moved at its annual general meeting to appoint as auditor a person other than the retiring auditor or providing expressly that a retiring auditor shall not be appointed. (4) Where, for any reason, the appointment of an auditor omes to an end the person who made the appointment under subsetion (1) and the auditor shall, not more than 14 days after the termination, eah give notie in writing to the Authority of the reasons for the termination. 99 AT 16 of 2008 Page 25

26 Setion 28 Insurane At C Auditors to report to Authority (1) If the auditor appointed under setion 27B beomes aware of any matter whih is suh as to give the auditor reasonable ause to believe that the person who appointed the auditor may be in ontravention of (i) (ii) this At; or any diretion or requirement imposed under this At; and the matter is likely to be of material signifiane in relation to the Authority s funtions under this At, the auditor must report suh matter in writing to the Authority. (2) No statutory or other duty to whih an auditor may be subjet is regarded as ontravened by reason of the auditor ommuniating in good faith to the Authority, whether or not in response to a request made by the Authority, any information or opinion under subsetion (1). (3) This setion applies only to any matter of whih the auditor beomes aware in the apaity of auditor and whih relates to the business or affairs of the person who appointed the auditor D Corporate governane Every registered insurane manager and insurane intermediary must establish, implement and maintain an appropriate and effetive orporate governane framework, whih ensures that the insurane manager or intermediary is soundly and prudently managed (whih inludes being soundly and prudently overseen by its board of diretors or, if it has no board of diretors, its equivalent governing body). 101 PART 7 CONNECTED PERSONS 28 Persons to whom this Part applies (1) Subjet to subsetion (2), this Part applies to () an authorised insurer; a registered insurane manager; and a registered insurane intermediary, and the expression a person to whom this Part applies shall be onstrued aordingly. (2) The Authority may by regulations exempt a person or lass of persons to whom this Part would otherwise apply; and any other person or lass of persons, Page 26 AT 16 of 2008

27 Insurane At 2008 Setion 29 from a requirement to omply with a provision of this Part. 29 Conneted persons [1986/24/20] (1) No person to whom this Part applies shall appoint a person as diretor, ompany seretary, hief exeutive, auditor, prinipal ontrol offier or manager of that person, nor shall a person beome ontroller of, or insurane manager of, a person to whom this Part applies, unless a written notie ontaining suh partiulars as may be determined by the Authority is served on the Authority by in the ase of a diretor, ompany seretary, hief exeutive, auditor, prinipal ontrol offier or manager, the person to whom this Part applies; or 102 in the ase of a ontroller or insurane manager, the proposed ontroller or manager, not less than 28 days before the event or suh other period as the Authority may agree in writing. 103 (2) If it appears to the Authority that any person is not a fit and proper person to be appointed as a diretor, ompany seretary, hief exeutive, auditor, prinipal ontrol offier or manager; or 104 to beome a ontroller or insurane manager, of a person to whom this Part applies, the Authority may diret that suh person shall not, without the written onsent of the Authority, be appointed as suh a diretor, ompany seretary, hief exeutive, auditor, prinipal ontrol offier or manager or beome suh a ontroller or insurane manager. 105 (3) If it appears to the Authority that any diretor, ompany seretary, hief exeutive, auditor, prinipal ontrol offier or manager; or 106 ontroller or insurane manager, of a person to whom this Part applies, is not a fit and proper person to ontinue as suh, the Authority may diret that suh person shall not, without the written onsent of the Authority, ontinue as suh a diretor, ompany seretary, hief exeutive, auditor, prinipal ontrol offier, manager, ontroller or insurane manager. 107 (4) The Authority shall give written notie to the person onerned of any deision to make a diretion under this setion. 108 AT 16 of 2008 Page 27

28 Setion 29 Insurane At 2008 (5) Exept where the Authority is satisfied that urgent ation is neessary, the notie under subsetion (4) shall be served on the person not less than 28 days before the date on whih the diretion is to take effet. 109 (6) Any onsent by the Authority under subsetion (2) or (3) may be () given subjet to onditions; varied from time to time; and revoked at any time, and the Authority shall give written notie to the person onerned of any deision to exerise the powers onferred by paragraph, or (). 110 (7) No person shall aept or ontinue in any appointment referred to in subsetion (2) or (3); or beome or ontinue as a ontroller or insurane manager, in ontravention of a diretion under this setion. (8) It is the duty of a person to whom this Part applies to take are not to appoint or ontinue the appointment of a person in ontravention of a diretion under this setion. (9) In this setion and setion 29E, manager means (exept in relation to referenes to an insurane manager) a person working for or on behalf of the insurer onerned who, under the immediate authority of a diretor or its hief exeutive exerises managerial funtions; or is responsible for maintaining the aounts or other reords of the insurer. 111 (10) This setion is additional to and not in derogation of any other enatment relating to the qualifiation, appointment or removal of diretors or auditors. 29A Prohibitions (1) The Authority may impose a prohibition if it appears to the Authority that an individual is not a fit and proper person to perform any funtion in relation to an ativity arried on, or proposed to be arried on, by a person to whom this Part applies. (2) Before imposing a prohibition, the Authority must give the individual whom it proposes to prohibit an opportunity to make representations in aordane with setion 29B. Page 28 AT 16 of 2008

29 Insurane At 2008 Setion 29 (3) A prohibition may prevent an individual from performing any funtion speified in the prohibition, either in relation to a partiular person to whom this Part applies, or generally. (4) A person to whom this Part applies ommits an offene if without reasonable exuse that person permits an individual to perform a funtion whih the individual has been prohibited from performing. (5) A person who is the subjet of a prohibition ommits an offene if he or she performs any prohibited funtion. (6) A prohibition operates subjet to subsetions (7) to (9). (7) Notie of a prohibition must be served upon the individual prohibited, either personally or by registered post to the individual s last known address. (8) One it has been served a prohibition omes into operation on the expiry of time for appealing against it under setion 45; or if an appeal is brought within that time, on the determination or withdrawal of that appeal. This subsetion is subjet to subsetion (9). (9) If the Authority is of the opinion that a prohibition should have immediate effet the notie under subsetion (7) must ontain a statement to that effet together with the reasons for the opinion and the prohibition has effet on the giving of the notie. (10) A notie of prohibition must state the terms of the prohibition; state the reasons for imposing the prohibition; and () give partiulars of the right of appeal under setion B Prohibition proedure (1) If the Authority proposes to impose a prohibition under setion 29A(1), it must give written notie to that effet (a preliminary notie ) to the individual whom it is proposed to prohibit. (2) The preliminary notie must () (d) (e) state that the Authority proposes to impose a prohibition; state the terms of the proposed prohibition; state the grounds for imposing the prohibition; state that within 28 days the individual proposed to be prohibited may make representations to the Authority in suh manner as the Authority may speify in the preliminary notie; and give partiulars of the right of appeal under setion 45 that would be exerisable if the Authority imposed the prohibition. AT 16 of 2008 Page 29

30 Setion 29 Insurane At 2008 (3) The Authority must have regard to any representations made in aordane with subsetion (2)(d) before imposing a prohibition C Prohibitions: variation and revoation (1) On the appliation of a prohibited person, the Authority may vary or revoke a prohibition. (2) The Authority must give the prohibited person a statement of its reasons for any deision made on an appliation under subsetion (1) D List of prohibitions (1) The Authority must maintain and publish a list of prohibitions. (2) The list must speify the individual prohibited and the funtions to whih the prohibition applies E Warning noties (1) The Authority may before making a diretion under setion 29(3); () before imposing a prohibition under setion 29A(1); or in any other irumstanes that the Authority onsiders it appropriate to do so, give a written warning notie under this setion to a person who is or has been an atuary to an insurer, or a diretor, ompany seretary, hief exeutive, ontroller, manager or prinipal ontrol offier ( the relevant person ) of a person to whom this Part applies. (2) A warning notie under this setion is a notie that the Authority has grounds to believe that suh ativities or irumstanes as are speified in the notie are prejudiial to the relevant person s fitness and propriety and must be aompanied by a statement of the reasons for the giving of the notie. (3) A warning notie may (but need not) () propose that the relevant person take suh ation as is speified in the notie; request the relevant person to propose ation; or speify ation that the relevant person must take and the time within whih it must be taken. (4) Where a warning notie has been given under this setion, the Authority must, before making a diretion under setion 29(3), or imposing a prohibition under setion 29A(1), take into aount any ation taken by the relevant person in response to the warning notie. Page 30 AT 16 of 2008

31 Insurane At 2008 Setion 30 (5) The giving of a warning notie under this setion does not limit the powers of the Authority under setion 29 or 29A; and is not required before the Authority may exerise those powers. (6) A warning notie issued under this setion has effet for a period of up to 3 years from the date on whih it is issued under subsetion (1) and suh period must be speified in the notie; or until suh time as the Authority is ontent that any ation under subsetion (3) has been ompleted to its satisfation. (7) The Authority may dislose the irumstanes surrounding a warning notie, to () (8) In subsetion (7) an employer who urrently employs a relevant person; a person who has reeived an employment appliation from a relevant person and who, if suessful in the appliation, would be required to be an atuary to an insurer or a diretor, ompany seretary, hief exeutive, ontroller, manager or prinipal ontrol offier of a person to whom this Part applies; or a ompany of whih a relevant person is, or is likely to beome an offier. offier (exept in relation to prinipal ontrol offier ) means an offier of a ompany for the purposes of the Company Offiers (Disqualifiation) At 2009 (see setion 1(2) of that At) Notie of essation [1986/24/20A(1)] Where a person eases to be a diretor, ompany seretary, hief exeutive, auditor, prinipal ontrol offier, manager, ontroller or insurane manager of a person to whom this Part applies, a written notie ontaining suh partiulars as may be determined by the Authority shall be served on the Authority within 14 days of suh essation by in eah ase, the person to whom this Part applies; and in the ase of a person easing to be a hief exeutive, ontroller or insurane manager, the person easing to be the hief exeutive, ontroller or insurane manager (as the ase may be). 117 AT 16 of 2008 Page 31

32 Setion 31 Insurane At 2008 PART 8 SUPERVISION CHAPTER I The powers of the Authority Loation of assets [1986/24/28] (1) The Authority may diret an authorised insurer, registered insurane manager or insurane intermediary in writing, to maintain in the Island, or transfer to and keep in the ustody of a bank speified in the diretion, assets of the insurer, insurane manager or insurane intermediary (as the ase may be) of suh value and desription as may be direted. 119 (2) No assets kept in the ustody of a bank pursuant to a diretion given under subsetion (1) shall, so long as the diretion is in fore be removed from the bank; or be made the subjet of any mortgage, harge or lien, exept with the prior written onsent of the Authority. 120 (3) Any mortgage, harge or lien reated by an authorised insurer, registered insurane manager or insurane intermediary in ontravention of subsetion (2) shall be void against the liquidator and any reditor of the person in question Winding up of insurers [1986/24/23] Shedule 3 (insolveny and winding up) shall have effet. 33 Residual power to impose requirements [1986/24/22F] (1) The Authority may require an insurer, insurane manager, insurane intermediary or any other person involved in the management or administration of an insurer, insurane manager or insurane intermediary to take suh ation or to refrain from taking suh ation as appears to the Authority to be neessary to fulfil the regulatory objetives referred to in setion 1 and, but without prejudie to the generality of that power for the purpose of proteting poliyholders or potential poliyholders of an insurer against the risk that suh insurer may be unable to meet its liabilities; in the ase of long-term business, to fulfil the reasonable expetations of poliyholders or potential poliyholders; or Page 32 AT 16 of 2008