BMA cancels insurer’s registration
The Bermuda Monetary Authority has cancelled the insurance registration of Economic Risk Insurance, Ltd, a Class 3 insurer, for breaches of the Insurance Act 1978.
The BMA said yesterday it was satisfied the company was in breach of the Insurance Act in that it had not:
• Conducted any business within two years of its registration
• Paid annual fees and late payment fees due for 2019 and 2020
• Maintained a principal representative
• Filed statutory financial returns for the years ended December 31, 2015 to 2019 inclusive.
The BMA, the island’s financial-services regulator, exercised its powers to cancel the company’s registration under the provisions of sections 41(1)(b)(ii), (iv) and (v) of the Insurance Act.
The directors of Economic Risk Insurance Ltd are listed by the Bermuda Government as James Michael Temple, whose address is listed as Sacramento, California, and Richard Daley, with a listed address of Cedar House, Hamilton.
In a statement, the BMA said it was taking action to safeguard the interests of potential clients of the company. It viewed the above breaches as serious because of their nature and extent, and because they demonstrated systemic weaknesses of the company’s internal controls in all regards.
A BMA spokesman said: “The breaches outlined above were communicated to the company, which was afforded significant opportunities to remedy the same, however, it failed to take appropriate steps to address them.
“The Authority no longer has confidence in the company’s ability to manage its affairs to the benefit of its potential clients or to satisfy the Minimum Criteria as detailed in Schedule 1 of the Insurance Act.
“The cancellation of the company’s registration highlights the importance of the Authority’s role in protecting the reputation of the jurisdiction and protecting the interests of clients of the Authority’s regulated entities.”
Once the enforcement action was initiated, the statutory process was followed, culminating in a ten-day appeal period, which expired on December 24, 2020. The decision was not appealed.