Dana Munnings-Gray, acting superintendent of insurance at the Insurance Commission of the Bahamas, summarises recent legislative updates and their implications for the industry
Insurance is a cornerstone of economic stability and growth, offering essential protection and support to individuals, families, and businesses.
To maintain this role, the sector must have a well-regulated environment that prioritises consumer protection and supports a highly skilled and professionally adept workforce.
Regulatory updates in the insurance industry are essential for upholding a robust and transparent sector that can safeguard consumers and foster market stability. As the insurance landscape transforms with emerging risks, technological innovations, and evolving consumer demands, regulations must adapt accordingly.
These updates ensure that the industry operates under fair and equitable principles, cultivating trust and confidence among policyholders. Additionally, regulatory updates mitigate systemic risks, strengthen the industry’s resilience, and support sustainable growth by establishing clear regulations for compliance and operational procedures.
The Insurance Commission of the Bahamas (ICB) is the regulatory body that oversees and governs the country’s insurance industry. Established to maintain a stable, transparent, and efficient insurance market, the ICB ensures adherence to the Insurance Act 2005 and the External Insurance Act 2009.
These laws established a comprehensive framework for licensing insurers and intermediaries, monitoring the financial well-being of insurance companies, and protecting policyholders’ interests.
The commission’s responsibilities encompass conducting regular inspections and audits, addressing consumer complaints, and ensuring all market participants uphold the highest standards of integrity and professionalism. Through its diligent regulatory efforts, the ICB strives to cultivate a trustworthy and resilient insurance sector that contributes to the overall economic stability and growth of the territory.
Legislative modernisation
The Bahamas is set to modernise and harmonise its insurance legislation, marking a significant step forward in 2024. The ICB is leading the charge, merging the Insurance Act 2005, the Insurance (General) Regulations 2010, and the External Insurance Act 2009 into a single, cohesive framework. This strategic initiative is designed to streamline the regulatory environment, providing greater clarity and operational efficiency for key stakeholders.
The amalgamation process, which has already commenced, involves not only combining these pieces of legislation but also amending them to form a unified Insurance Act and Insurance (General) Regulations. A primary goal of this effort is to eliminate preferential treatment of external insurance companies over domestic ones.
Additionally, the updated legislation aims to be progressive and innovative, enhancing the jurisdiction’s appeal to those interested in conducting insurance business in the Bahamas.
To further bolster regulatory clarity and the financial stability of the Bahamian insurance sector, the commission has addressed inconsistencies within Regulation 60 of the Insurance (General) Regulations 2010, particularly regarding share capital registration requirements.
In light of these developments, the ICB has committed to a detailed examination of the existing rules and regulations that govern the insurance industry. Their goal is to ensure that these regulations continue to serve their fundamental purposes — protecting consumers who rely on insurance; ensuring that insurance companies remain financially sound; and maintaining a competitive market that is fair for all players.
Additionally, the ICB is focusing on modern threats that impact the insurance landscape, such as the risks posed by cyber attacks and the implications of climate change.
These are complex challenges that require modern solutions, and the updated regulations will aim to address them effectively.
The upcoming legislative work is expected to pave the way for a more robust and adaptable regulatory environment that supports the continued growth and development of the Bahamian insurance industry.
Combating emerging issues
The ICB is intensifying its crackdown on money laundering, terrorist financing, and proliferation financing through stringent enforcement of international compliance standards.
Following the Anti-Terrorism (Amendment) Act 2019, the commission has issued directives based on United Nations Security Council releases regarding threats posed by entities like ISIL (Da’esh), Al-Qaida, Iran, and North Korea.
These directives demand enhanced vigilance from the financial sector, especially targeting high-risk jurisdictions identified by the Financial Action Task Force (FATF).
The FATF, recognising these jurisdictions as prone to money laundering and terrorist financing activities, has prompted the commission to mandate that licensees implement rigorous due diligence when engaging with individuals, companies, and financial institutions from these regions.
These entities are also required to report their risk mitigation strategies back to the commission.
In its commitment to combat financial crimes, the ICB continues to align its anti-money laundering and counter-terrorism financing framework with the FATF’s 40 recommendations and methodologies.
Through strong governance, collaboration with industry stakeholders, an unwavering commitment to combating financial crime, and a focus on professional development and international engagement, the commission strives to ensure a healthy and well-regulated insurance environment for all participants.
For those seeking further details on these updates or wishing to offer feedback, the commission has made resources available on its website at www.icb.gov.bs
