Friendly society calls for lift of TCD block
Bentley Friendly Society has lobbied David Burt, in his capacity as finance minister, to allow it to sell motor insurance policies covering third-party liability.
The organisation is encouraged by the Progressive Labour Party government’s support for co-operative economics, exemplified by friendly societies, whose members are also owners.
In e-mail correspondence with Bentley late last year, Mr Burt made clear that the society had the Bermuda Government’s support in insuring first-party risks of its members — but added that it would have to be licensed by the Bermuda Monetary Authority in order to cover third-party liability risks.
The Transport Control Department stopped accepting motor insurance certificates issued by Bentley Mutual Insurance in April 2014.
Kevin Bean-Walls, one of Bentley’s founding members, claimed existing laws — namely the Friendly Societies Act 1868 and the Insurance Act 1978 — allowed Bentley to offer motor insurance.
Section 57 of the Insurance Act states that “insurance business carried on by a friendly society registered under the Friendly Societies Act 1868 ... shall be deemed not to be insurance business within the meaning of this Act”.
For its part, the Friendly Societies Act enables a society to make good “any loss sustained by the members by fire, collision, tempest or shipwreck, or by any contingency whereby they sustain any loss or damage to their motor bikes, autos, real estate or boats” provided that investment of each member accumulate or be employed for the sole benefit of the investing member, their spouse or their beneficiaries.
Mr Bean-Walls shared e-mail correspondence between fellow Bentley trustee Craig Walls and Mr Burt in December last year, imploring the Premier to instruct the TCD to accept Bentley motor insurance certificates.
Mr Burt responded: “You can provide first-party insurance for your members and continue to do so. I hope that you expand the offerings to your members and continue to offer them mutual assistance and making good losses for their property.
“If you wish to insure third-party risks, which is not the property of your members, but liability which may be incurred by your members to another party, please follow the process of being licensed as an insurer by the BMA to offer third-party risks.”
Bentley had issued 47 motor insurance certificates before the TCD stopped accepting them, Mr Bean-Walls said.
“All we are asking is for the handcuffs to be taken off and for us to be able to go back to providing the service to our community that we were providing before,” Mr Bean-Walls added.
“The for-profit insurers are among the wealthiest people on the island. Our belief is that there should be persons of colour who can participate in this area of the economy and we believe that the law entitles us to do so.”
He said he believed Bentley Mutual Insurance was the first black-owned insurer to issue a motor insurance certificate in Bermuda. He argued that pressure from established insurers had led to the TCD action.
He cited a letter from the lawyers for the Motor Insurers’ Fund, sent to the Attorney-General’s office on March 28, 2014, just a week after the BMA’s statement of concern was issued.
MIF was established by agreement between the Ministry of Transport and insurers in Bermuda to provide an indemnity for victims of uninsured drivers.
The letter, from Jeffrey Elkinson of Conyers Dill & Pearman on behalf of MIF, expressed concern that Bentley had been providing motor insurance.
“It is our view that there has to be a clear expression by either the Attorney-General or the Registrar General that the Friendly Society is entitled to act as an insurer,” the letter stated.
It concluded: “The matter is most urgent, as without exaggeration, every person in Bermuda is at risk whilst insurance policies are being issued by this unregulated entity.”
In December 2014, an effort to repeal parts of the Insurance Act to impose industry-standard regulations and fees on trade unions and friendly society insurers failed to pass in the House of Assembly amid confusion over the “yea or nay” vote.
Bentley went to court in June 2016, seeking declaratory relief to oblige the TCD to accept their motor insurance policies.
Judge Stephen Hellman turned down Bentley’s request, but said there was no in-principle reason why friendly societies should not carry on insurance business within the meaning of the Motor Car Insurance (Third-Party Risks) Act 1943, provided they had authorisation from the Governor.
In his judgment, Judge Hellman noted that before granting such approval, the Governor would be likely to consider whether Bentley would be able to satisfy a large third-party claim — such as one in the sum of $1 million.
Judge Hellman added: “The members have the opportunity to inform themselves as to the regulatory position and take an informed decision whether to take out insurance with an unregulated provider. Third-party beneficiaries of cover provided by a friendly society would have no such opportunity.”
Mr Bean-Walls said Bentley plans to reach out to William Spriggs, the newly appointed director of co-operative economics, to explore potential expansion of the organisation’s offerings.
For more information about Bentley Friendly Society, e-mail firstname.lastname@example.org
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