The Bermuda Monetary Authority has restructured its insurance department with the addition last week of a second deputy director and a plan to increase the size of its staff roster from 24 to 32 within the year.

The restructuring comes at a time when the Authority?s responsibilities as sole regulator of Bermuda?s financial services sector are growing at a rapid pace. It is also in line with the changing international standards in insurance regulation and the recommendations made in two reviews of Bermuda?s regulatory framework that were conducted by KPMG and the International Monetary Fund.

Last Monday, new co-deputy director Shanna Lespere took over responsibility for licensing and authorisations. Former sole director of the department, Shelby Wheldon will now focus solely on compliance. The number of staff they oversee has almost doubled since 13 civil servants moved from the Registrar of Companies to the BMA in 2001. The current 24 should swell to 32 within the year and potentially 40-50 by 2008.

Mr. Wheldon said that recent recruitment has drawn a number of bright Bermudians with only a few staff from overseas. Ongoing training and development of staff is being viewed as a very important priority in the newly revamped department.

The growth of the department came partly because of the influx of large international reinsurance companies establishing in Bermuda.

?We have had a number of waves, the last one subsequent to September 11, and they do present different regulatory challenges from what a captive would require from a regulatory perspective and in that regard there is a real need for us to increase our skill sets and the number of individuals who are exercising regulatory oversight over that particular sector,? Mr. Wheldon said.

The BMA now regulates approximately 1,300 active insurers writing premiums of almost $95 billion with assets of $235 billion and capital and surplus of over $87 billion.

Ms Lespere said that alongside her appointment, the division of the department and the increase of staff numbers should send a message to the market that the BMA is serious about regulating at a high standard. Going forward, she plans to review current policies and procedures to find efficiencies.

?It is important we are mindful of the quality of service that comes out of department and certainly for the industry as well as corporate service providers as well as the general public, we want that to be a high level of service,? she said.

With Ms Lespere?s area of oversight more focused on client service and Mr. Wheldon?s more focused on tactical analysis, Mr. Wheldon said there was a real need to divide the department and have individuals at high level who are dedicated to those two different goals and tactics.

On the regulatory side, the BMA has recently improved how it ensures that companies operating here are complying with the insurance regulations. Beyond the annual reporting requirement of all registered insurance entities, which includes the submission of an audited financial return, the development of the BMA?s new Supervisory Model for Insurance enables regulators to perform onsite inspections on high profile companies; particularly the large professional commercial reinsurance companies class three and class four companies.

?It takes that statutory review to the next level where we would look at issues like corporate governance and internal controls and the like so that we get a real sense of how these companies are operating and ensuring that they are operating in a manner of which the regulator is comfortable,? Mr. Wheldon said.

These inspections will originally be held on a biannual basis but eventually may be held annually to ensure that information is as up to date as possible.

Mr. Wheldon said: ?We always had the ability to perform onsite inspections, but historically those onsite inspections were as it relates to issues of non-compliance now this well become a regular part of our regular calls to the site.?

The BMA will also offer prudential visits to allow the company to come in and talk to regulators in order to update them on what is happening as a matter of course or where they think that it is important for the BMA to have an awareness of what is happening.

The ongoing probes of the insurance industry spearheaded by New York Attorney General Eliot Spitzer have cast a spotlight on a number of Bermuda insurers but while the BMA acknowledges that the investigation has required additional resources, the regulators cannot speak to specifics when it comes to any Bermuda registered entity as it relates to those investigations.

Mr. Wheldon said: ?Some have required us to do a bit more investigation, a bit more review not only with respect to the specific companies but with respect to some of the issues in general as to how we best address that from an ongoing regulatory perspective.?