ANGUILLA: THE FINANCIAL SERVICES COMMISSION DETAILS RESPONSIBILITIES OF INSURANCE MANAGERS

by Carlyle Rogers

2008-04

The Financial Services Commission (“the Commission”) in Anguilla, which is the island’s regulatory body, has issued recently, a series of guidelines to insurance managers under section 48 of the Financial Services Commission Act 2003. This section grants the Commission the power to issue guidelines to licensees in the operation of their business. This article, which deals with the responsibilities of insurance managers, is the first in a three set series which looks at these guidelines. Frequent readers of this newsletter would know that GCSL Anguilla holds an insurance manager’s licence under the Insurance Act 2004 in the name of Global Insurance Managers (Anguilla) Limited and thus these guidelines are particularly pertinent to the GCSL group.

Section 8(8) of the Insurance Act requires every insurer who maintains a Class B licence to appoint an insurance manager. This is the service that GCSL Anguilla offers to licensed insurers in Anguilla. An insurance manager is defined as a person resident in Anguilla, who not being an employee of any insurer, is or has available to him, a person(s) with such insurance knowledge and expertise as the Commission may deem necessary for the conduct and management of the insurance business of any insurer(s) in a competent manner.

 The guidelines specify that the insurance manager should act as a consultant and advisor to the managed company in respect of insurance matters and be responsible for or have oversight of the following:

·          Compliance with all applicable legislation

·          Risk management

·          Policy administration

·          Collection of premiums

·          Settlement of liabilities and obligations when due

·          Payment of commissions and brokerage fees

·          Recording of claims and technical reserves

·          Arrangement of adequate reinsurance protection

·          Reinsurance recoveries

·          Issuing debt and credit notes

·          Claims settlement; and

·          The investment of assets and reserves

 The guidelines go on to state that the insurance manager is also responsible for the effective management of the insurer. This includes, but is not limited to, doing the following:

·          Appointing and granting power to the other parties. The Commission has indicated that it should be notified of all such appointments or

·          granting of powers and be provided with the copies of all related contracts or service agreements.

·          Ensuring that the bank accounts of the Class B insurer are properly managed and that all the assets are properly secured and controlled.

·          Ensuring that all transactions are recorded properly on a timely basis.

·          Ensuring that the insurer has adequate staff, support personnel, offices and supporting facilities to perform its functions adequately and efficiently.

·          Acting as the liaison or point of contact between the insurer and the Commission.

·          As a consequence of the above, the Commission has indicated that additional responsibilities which the insurance manager have include the following:

1.       Providing the insurer with timely updates on all applicable legislation, regulations, rules or guidelines.

2.       Providing any other information that is reasonably necessary for the insurer to comply with the above.

3.       Preparing and providing, at least annually, reports on the insurer’s financial condition to its directors.

4.       Ensuring the timely submission of prescribed reports, financial statements and statistical returns on behalf of the insurer.

5.       Paying the insurer’s licence fees to the Commission.

6.       Notifying the Commission of material changes in the business plan or business model of the insurer.

7.       Notifying the Commission of changes in the directors, managers and officers of the insurer.

8.       Notifying the Commission of changes in shareholders/beneficial interest of the insurer.

9.       Notifying the Commission with any known information that could have an adverse material impact on the operations of the insurer.

10.    Providing assistance where necessary at meetings with the Commission concerning the insurer.

11.    Maintaining complete and proper records for the insurer, including minutes of board meetings.

12.    Ensuring compliance with the Anti Money Laundering Regulations and submitting suspicious transactions reports as and when applicable.

The Commission has mandated the entering of contractual arrangements between the insurance manager and the insurer. There should be a formal agreement between the two parties which will describe and govern their relationship and set out the respective functions, duties and responsibilities. The agreement should address the following:

·          The power or the manager to act on behalf of and in the name of the principal.

·          The provision of regular management information reports by the insurance manager to the directors of the insurer.

·          The record-keeping function and the records to be maintained by the insurance manager; all records should be maintained in accordance

·          with the requirements of all applicable legislation and or regulations.

·          A requirement that the insurance manager will ensure compliance by the insurer with all requirements of the Commission.

·          Applicable termination of contractual arrangements, consistent with the applicable insurance and company legislation; and Confidentiality arrangements.

GCSL Anguilla welcomes the issuance of these guidelines and will, of course, comply with the same while working with licensed captive and other insurance companies to develop Anguilla as a reputable insurance domicile.