Concern as insurers face business fee hike
The Senate agreed to increase fees for captive and domestic insurers yesterday.
Amendments to the Bermuda Monetary Authority Act will also impose financial penalties on those companies who are late paying their fees and enable the BMA to recover unpaid fees as a civil debt in any court or competent jurisdiction, if required.
Previously the Bermuda Insurance Management Association told
The Royal Gazette the increases would have a detrimental impact on the Island's competitiveness as a domicile.
The increased fees will see Class 3 insurers pay $30,000 to the BMA compared to the $19,000 they used to pay. Domestic insurers will also see their fees increase by $25,000
Yesterday Junior Finance Minister David Burt said the fees were being increased because the BMA had an increased regulatory role in Bermuda.
He added: “While the BMA is committed to running its affairs efficiently so as to keep the financial burden on regulated firms as low as possible, further increases in resources remain necessary if the BMA is to achieve its objectives and continue to play its key role in Bermuda's economy.”
Opposition Senate Leader Jeanne Atherden said she was concerned the fee increases may have an impact on Bermuda's reputation as a competitive business jurisdiction.
She questioned why the BMA could not achieve best practice without a rise in fees.
“Why not reorganise so there isn't more expense?” she asked.
“The reason I am asking this is it has a direct knock-on effect to the cost of doing business in Bermuda.
“We have a real concern as we go forward as to whether we are going to maintain the competitiveness.”
She asked when the last time was that there was a review of the operational efficiency of the BMA.
She also said perhaps it is time for the BMA board to be replaced with an independent body to oversee the authority.
Independent Senator Joan Dillas Wright said: “I understand the BMA has a major responsibility in overseeing the companies registered in Bermuda, but I also have concerns about this increase and I just wondered whether this was exorbitant.”
In his reply, Sen Burt said Bermuda remains competitive when its fees are compared to those in other jurisdictions.
“Our fees are definitely within reason,” he said.
He added that the International Monetary Fund last reviewed Bermuda's regulatory regime in 2007.
In other legislation related to the BMA yesterday, the Senate also passed the Insurance Amendment (No.3) Act 2010.
The bill requires that insurers have enough funds to satisfy regulatory levels so there is a basic amount of money available when people are ready to make a claim.
It will also extend the powers of the Bermuda Monetary Authority allowing them to investigate other classes of insurers and establish a new regime for the classification of long-term insurers.
The legislation was passed without debate, other than a comment from Sen Atherden who said: “We understand the need for this piece of legislation.”