Finance Minister Paula Cox briefed the House of Assembly yesterday on two Amendment Regulations concerning the Insurance Industry in Bermuda.

The Insurance Returns and Solvency Amendment Regulations 2005 and the Insurance Accounts Amendment Regulations 2005 were tabled in the House.

Ms Cox said the International Monetary Fund (IMF) carried out an in-depth on-site review of Bermuda?s financial services legislation in 2003 as part of its Offshore Financial Centre Assessment Programme.

The assessment, she said, covered the financial services sector as well as anti-money laundering legislation and controls in Bermuda.

?The IMF?s findings were published in two volumes in March of this year. Volume I is entitled Review of Financial Sector Regulations and Supervision and Volume II is entitled Detailed Assessment of Observance of Standards and Codes,? she said.

She added that the assessment was available on the Bermuda Monetary Authority?s web-site as well as the IMF web-site.

?The IMF Assessment identified a number of aspects of our regulatory framework that required further amendment or development. For the insurance sector, the Assessment highlighted the difficulties involved in applying a rating system to the regime that Bermuda has put in place for supervising a highly sophisticated insurance and reinsurance market,? she said.

Ms Cox said it was determined that the regulatory framework needed to be reviewed in order to continue to ensure that the Authority could function effectively as an independent regulator.

As a result of the assessment, the Insurance Act was amended in 2004 to make adjustments in various aspects of the regulatory framework.

The amendments, she told the House, included but were not limited to the following:

Provisions which further clarified the appointment and revocation of Auditors and Loss Reserve Specialists;

Provisions which were intended to give the Authority a formal power to issue codes of conduct for the purpose of providing guidance as to the duties, requirements and standards to be complied with and the procedures and sound principals to be observed by persons registered under the Insurance Act, as well as approved auditors, principal representatives and loss reserve specialists; and

Provisions which explicitly set out the obligations for approved auditors to communicate certain matters to the Authority and provisions which provide protection to such auditors where they communicate information about an insurer to the Authority in good faith.

Ms Cox said the proposed amendments that are set out in the Insurance Accounts Amendment Regulations 2005 and the Insurance Solvency and Returns Amendment Regulations 2005 (the Amendment Regulations) are for the most part directly related to the Insurance Act Amendment 2004.

?The principal regulations established the type of reporting requirements that must be set out in an insurer?s statutory balance sheet and an insurer?s statutory financial return. The proposed changes include but are not limited to additional reporting requirements that take into account changes in the regulatory arena,? she said.

Ms Cox said the proposed changes had been reviewed by both industry and the Insurance Advisory Committee (the ?Committee?), which is a statutory body appointed by the Minister of Finance pursuant to the Act to give advice to the Authority as well as the Minister of Finance on any matters connected with the discharge of its functions under the Act, including matters which relate to the development of the insurance industry in Bermuda.

?I would like to acknowledge the commitment and diligence of the representatives of all those companies and organisations who worked with the Government in drafting these regulations,? she said.

The Insurance Accounts Amendment Regulations 2005 and the Insurance Returns and Solvency Amendments Regulations were referred to Committee.