Finance Minister Eugene Cox yesterday announced the separation of insurance regulation from Government.

The Insurance Division, which has previously been part of the Registry of Companies as a division of the Finance Ministry, will become part of the Bermuda Monetary Authority (BMA) as of the New Year. The current Registrar of Companies, Jeremy Cox (pictured) - who is Finance Minister Eugene Cox's son - will head up the Division.

The move follows recommendations from last year's KPMG Review of Financial Regulations in the Caribbean Overseas Territories and Bermuda. And this month's Throne Speech highlighted Government's commitment to bring the Island in line with KPMG's recommendations: "In cooperation with the United Kingdom, the Government will continue to implement recommendations contained in the KPMG Review. Legislative initiatives will be aimed at improving Bermuda's competitiveness as a jurisdiction."

Eugene Cox said yesterday: "The goal is to be seen to be transparent and more efficient."

He added that the move will strengthen the Island's reputation as a jurisdiction with "clean regulatory authority above reproach".

Eugene Cox said that he, as Finance Minister, is required to appoint the independent authorities: "but once appointed are quite separate," he said.

In a similar vein, Eugene Cox said Government had already turned over the licensing of banks and financial institutions to the BMA, a job that previously fell to the Finance Minister.

The net result of these changes, the Finance Minister said, is that the BMA will now become the sole regulatory body for insurance and the financial services sector in Bermuda.

Jeremy Cox vouched that insurance regulation would become independent of Government at this year's RIMS conference in May. But, he said this would be something to come towards the end of 2002. Consultation between Government and the Insurance Advisory Committee was cited yesterday as moving the split forward.

Robert Steinhoff, a managing partner at KPMG and a member of the Insurance Advisory Committee - which has to this time advised Government and will now work with the new Insurance Division - said the move would ensure an "independent and effective regulatory environment, which is particularly important given the substantial new capital being invested in new insurance start-ups."

Mr. Steinhoff added that there was some $55 billion of capital in Bermuda's existing insurance market, and that amount is set to grow by more than $6 billion with the announcement of seven new Bermuda insurers since September 11.

On the heels of the Insurance Division becoming independent of Government, the BMA will undergo a complete restructuring of its existing operations. In future, the BMA will have four main operating divisions: deposit-taking (dealing with banks, deposit companies, trust companies and the credit union), insurance, investment (dealing with investment businesses, collective investment schemes and the Bermuda Stock Exchange) and authorisation and compliance (dealing with companies, partnerships and permits).

Meanwhile, the post of Registrar General will be left empty, but Jeremy Cox said an acting registrar will be appointed at the time of his move to the BMA. Jeremy Cox said the Registry of Companies - which will remain under the Finance Ministry - follows succession planning and he added that there are individuals within the department who would be capable of filling the role of Registrar. He said he did not wish to pre-empt the Minister's decision on his replacement, and refrained from naming any possible successors.