Anguilla Insurance Act

REVISED STATUTES OF ANGUILLA

CHAPTER I16

INSURANCE ACT

Showing the Law as at 15 December 2004

This Edition was prepared under the authority of the Revised Statutes and Regulations Act,

R.S.A. c. R55 by the Attorney General as Law Revision Commissioner.

This Edition revises Act 6/2004, in force 1 October 2004

Published by Authority

Printed in

The Attorney General’s Chambers

ANGUILLA

 

A

NGUILLA

REVISED STATUTES OF ANGUILLA

CHAPTER I16

INSURANCE ACT

Showing the Law as at 15 December 2004

This Edition was prepared under the authority of the Revised Statutes and Regulations Act,

R.S.A. c. R55 by the Attorney General as Law Revision Commissioner.

This Edition revises Act 6/2004, in force 1 October 2004

Published by Authority

Printed in

The Attorney General’s Chambers

ANGUILLA

©

All rights reserved. No part of this publication may be reproduced in any form or by any means (including

photocopying) without the written permission of the Government of Anguilla except as permitted by the

Copyright Act or under the terms of a licence from the Government of Anguilla.

Government of Anguilla

Anguilla

Insurance Act R.S.A. c. I16

15/12/2004 3

INSURANCE ACT

TABLE OF CONTENTS

S

ECTION

1. Interpretation

2. Insurance businesses to be licensed

3. Classes of licences and capital requirements

4. Ownership by trustees

5. Application for a licence

6. Payment of annual fee

7. Use of the word “insurance”, etc.

8. General requirements for licensed insurers

9. General requirements for other licensees

10. Annual returns by licensed insurers

11. Annual returns by other licensees

12. Shares not to be held, issued or transferred without the approval of the Commission

13. Number and appointment of directors

14. Cease and desist orders

15. Examination of a licensee

16. Enforcement action

17. Surrender of licence

18. Protected premium accounts

19. Additional requirements for foreign insurers carrying on long term business

20. Non-application, etc.

21. Regulations

22.

23. Offences

24. Transitional provisions

25. Citation

R.S.A. c. I16

Gazette NoticesInsurance Act Anguilla

4 15/12/2004

Anguilla

Insurance Act R.S.A. c. I16

15/12/2004 5

INSURANCE ACT

Interpretation

1.

“actuary” means a person who has qualified as an actuary by examination of the Institute of Actuaries

in England or the Faculty of Actuaries in Scotland or the American Academy of Actuaries in

North America, and who is a current member of good standing of one of the above

professional associations or another professional actuarial association which is recognised by

the Commission as such for the purpose of this Act;

“affiliate” means a person controlling, controlled by, or under common control with, another person;

“approved external insurer” means an insurer licensed as such under section 3(3);

“auditor” means a person who has qualified as an accountant by examination of, and holds a

practicing certificate issued by, one of the Institutes of Chartered Accountants in England and

Wales, Ireland and Scotland, or the Canadian Institute of Chartered Accountants or the

American Institute of Certified Public Accountants, and who is a current member of good

standing of one of the above Institutes or another professional accountancy body which is

recognised by the Commission as such for the purpose of this Act;

“Commission” means the Anguilla Financial Services Commission established under section 2 of the

Financial Services Commission Act;

“Companies Act” means the Companies Act and any amendments thereto;

“Company Management Act” means the Company Management Act and any amendments thereto;

“contract” includes policy;

“Court” means the High Court;

“dollar”or “$” means a dollar in the currency of the United States of America;

“domestic insurance business” means insurance business where the contract is in respect of the life,

safety, fidelity or insurable interest (other than in respect of property) of a person who at the

time of effecting the contract is ordinarily resident in Anguilla, or property that at the time of

effecting the contract is in Anguilla or, in the case of a vehicle, vessel or aircraft, or other

movable property is ordinarily based in Anguilla (but does not include re-insurance business);

“external insurer” means an insurer who is neither a local nor a foreign insurer and is registered as a

foreign company pursuant to the Companies Act or is constituted as a mutual association

acceptable to the Commission;

“Financial Services Commission Act” means the Financial Services Commission Act and any

amendments thereto;

R.S.A. c. I16

In this Act—Insurance Act Anguilla

6 15/12/2004

“financial year”, in relation to a licensee, means the period not exceeding 53 weeks at the end of

which the balance of the licensee’s accounts is struck or, if no such balance is struck or if a

period in excess of 53 weeks is employed, then a calendar year;

“foreign insurance business” means insurance business where insured risks are situated outside of

Anguilla;

“foreign insurer” means an insurer which carries on foreign insurance business and is constituted

through partnership, shareholding or other mutual association acceptable to the Commission;

“general business” means insurance business other than long term business, and for the removal of

doubt includes—

(a) credit life business, that is the business of effecting and carrying out contracts of

insurance against risk of loss to persons arising from the non-payment of debts due to

such persons by reason of the death of their debtors;

(b) employee group business, that is the business of effecting and carrying out contracts

of insurance on the lives of employees of the insured or of an affiliate of the insured;

“Governor” means the Governor in Council;

“insurance agent” means a person (not being an insurer) who solicits directly, or through sub-agents,

advertising or other means, domestic business on behalf of not more than one insurer doing

general business and not more than one insurer doing long term business;

“insurance broker” means a person (not being an insurer) who negotiates directly, or through

representatives or other means, contracts of insurance or of reinsurance on behalf of more than

one insurer, or for placement with insurers or re-insurers;

“insurance business” means the business of undertaking liability under a contract of insurance to

indemnify a person in respect of any loss or damage, including the liability to pay damages or

compensation contingent upon the happening of a specified event, and includes re-insurance

business, long term business and running-off business including the settlement of claims;

“insurance manager” means a person resident in Anguilla not being the employee of any insurer who

is, or has available to him, a person with such insurance knowledge and expertise as the

Commission may deem necessary for the conduct and management of the insurance business

of any one or more insurers in a competent manner;

“insurance sub-agent” means a person (not being an insurer, insurance agent or insurance broker) who

solicits directly or through advertising or other means, domestic business on behalf of an

insurance agent or on behalf of an insurance broker;

“insurer” means a person carrying on insurance business who is—

(a) a local insurer, a foreign insurer or an external insurer; or

(b) an association of individual underwriters, including Lloyds of London and other

associations of underwriters recognised by the Commission;

Anguilla

Insurance Act R.S.A. c. I16

15/12/2004 7

“intermediary business “ means the business of an insurance agent, insurance broker, insurance subagent,

insurance manager or principal representive (insurance);

“licence” means a licence granted under this Act;

“local insurer” means an insurer, other than a foreign or external insurer, incorporated or constituted

in and having its head office in Anguilla;

“long term business” means insurance business involving the making of contracts of insurance—

(a) on human life or contracts to pay annuities on human life; but excluding contracts for

credit life insurance and term life insurance for a period of 5 years or less other than

convertible and renewable term life contracts;

(b) against risks of the persons insured sustaining injury as the result of an accident or of

an accident of a specified class or dying as the result of an accident or of an accident

of a specified class or becoming incapacitated in consequence of disease or diseases

of a specified class, being contracts that are expressed to be in effect for a period of

not less than 5 years or without limit of time and either not expressed to be terminable

by the insurer before the expiration of 5 years from the taking effect thereof or are

expressed to be so terminable before the expiration of that period only in special

circumstances therein mentioned; and

(c) whether by bonds, endowment certificates or otherwise whereby in return for one or

more premiums paid to the insurer a sum or series of sums is to become payable to the

person insured in the future, not being contracts falling within paragraphs (a) or (b);

“net worth” means excess of assets (including any contingent or reserve fund secured to the

satisfaction of the Commission) over liabilities other than liabilities to partners or

shareholders;

“person” includes an individual natural person, a company, or other legal entity recognised as such

under the laws of another country or jurisdiction;

“policy holder” means the person with whom an insurer has effected a contract of insurance;

“prescribed” means prescribed by regulation;

“principal representative (insurance)” means a person who—

(a) operates in Anguilla and, not being a

maintains for an insurer full and proper records of the business activities of that

insurer;

and

(b) holds a general trust licence issued under the Trust Companies and Offshore Banking

Act;

or

(c) holds a licence issued under the Company Management Act;

R.S.A. c. I16

bona fide employee of a licensed insurer,Insurance Act Anguilla

8 15/12/2004

or

(d) holds an insurance manager’s licence granted under this Act and maintains an office

and qualified staff in Anguilla;

“significant interest” means a person holding 10% or more of the issued share capital and voting

rights of a company or in the case of a company publicly traded on a stock exchange approved

by the Commission, a holding of 25% or more;

“trust” means a trust formed under the Trusts Act;

“Trusts Act” means the Trusts Act and any amendments thereto.

Insurance businesses to be licensed

2.

kind in or from within Anguilla unless he holds a licence authorising him to carry on that kind of

business and the licence has not been suspended.

(2) No person shall carry on, or hold himself out as carrying on, business in or from within

Anguilla as—

(a) an insurance manager;

(b) an insurance broker;

(c) an insurance agent;

(d) an insurance sub-agent; or

(e) a principal representative (insurance);

unless he holds a licence issued in the appropriate category under this Act and the licence has not

been suspended.

(3) A person who contravenes subsection (1) or (2) commits an offence and is liable on

summary conviction to a fine of $25,000 or to imprisonment for 1 year or to both.

(1) No person shall carry on, or hold himself out as carrying on, insurance business of any

Classes of licences and capital requirements

3.

persons who wish to carry on insurance business in or from within Anguilla—

(a) Class ‘A’ Insurer’s Licence which shall permit a local or an external insurer to carry

on insurance business, including domestic insurance business, generally in or from

within Anguilla, providing that it has and maintains an issued and paid up capital of at

least $200,000;

(b) Class ‘B’ Insurer’s Unrestricted Licence which shall permit a foreign insurer to carry

on any foreign insurance business, including long-term foreign insurance business,

providing that it has and maintains an issued and paid up capital of at least $200,000;

Anguilla

(1) The Commission may grant licences under one or more of the following categories toInsurance Act R.S.A. c. I16

15/12/2004 9

(c) Class ‘B’ Insurer’s General Licence which shall permit a foreign insurer to carry on

general foreign insurance business, but not long-term foreign insurance business,

providing that it has and maintains an issued and paid up capital of at least $100,000;

(d) Class ‘B’ Insurer’s Association Licence which shall permit a foreign insurer to carry

on general foreign insurance business and long-term foreign insurance business, with

2 or more owners of the insurer, and its affiliates, and to carry on no more than 30%

of its foreign insurance business (based on net premiums written) or 100% of its

reinsurance business with persons who are not owners of the insurer or its affiliates,

providing that it has and maintains an issued and paid up capital of at least $100,000;

(e) Class ‘B’ Insurer’s Group Licence which shall permit a foreign insurer to carry on any

foreign insurance business, including long-term foreign insurance business, with a

single owner of that insurer and its affiliates, and employees of the owner or its

affiliates, providing that it has and maintains an issued and paid up capital of at least

$25,000;

(f) Class ‘B’ Insurer’s Single Licence which shall permit a foreign insurer to carry on any

foreign insurance business, including long-term foreign insurance business, with the

sole owner of the insurer, if a company, providing that it has and maintains an issued

and paid up capital of at least $10,000.

(2) The Commission may grant licences under one or more of the following categories to

persons who wish to carry on intermediary business in or from Anguilla—

(a) Insurance Agent’s Licence;

(b) Insurance Broker’s Licence;

(c) Insurance Sub-Agent’s Licence;

(d) Insurance Manager’s Licence;

(e) Principal Representative (lnsurance)’s Licence.

(3) An external insurer having its principal or registered office in a place outside Anguilla

where the regulation and supervision of insurers is acceptable to the Commission may be licensed as

an approved external insurer under Class ‘A’.

(4) The Commission may order a licensee to increase its paid up capital to such greater

amount as it may determine having regard to the nature and extent of insurance business being or

sought to be undertaken.

(5) A company licensed to carry on long-term business may not also be licensed to carry on

general business unless the Commission is satisfied that there are clear provisions requiring that such

risks be undertaken separately on both a going concern and winding up basis.

(6) A company licensed under this section must ensure that its paid up capital is maintained in

an amount not less than required by its licence or by the Commission under subsection (4) and must

report immediately to the Commission when its net worth falls below the amount equivalent to its

required paid up capital.

R.S.A. c. I16

Insurance Act Anguilla

10 15/12/2004

Ownership by trustees

4.

owned by trustees of a trust formed under the Trusts Act, and such trust may be a purpose trust or a

trust comprising one or more beneficiaries.

With the approval of the Commission, the shares of an insurer licensed under this Act may be

Application for a licence

5.

containing the information prescribed and shall be accompanied by the prescribed fee.

(2) The Commission may grant a licence, subject to such licensing terms and conditions as it

thinks fit, or it may refuse to grant a licence.

(3) The Commission shall refuse to grant a licence if the Commission is of the opinion that—

(a) an applicant is not—

(i) a fit and proper person, and

(ii) is not qualified to carry on insurance business;

(b) the persons having a significant interest, whether legal or equitable, directly or

indirectly, in the applicant and its directors and officers are not fit and proper persons

to have an interest in or be concerned with the management of a licensee, as the case

may be;

(c) the applicant does not satisfy the requirements of this Act in respect of the application

and will, upon issuance of the licence, not be in compliance with this Act in respect of

licensing; and

(d) issuing the licence is against the public interest.

(4) In determining for the purposes of this section whether a person is a fit and proper person,

regard shall be had to all circumstances, including that person’s—

(a) honesty, integrity and reputation;

(b) competence, capability and experience;

(c) financial soundness; and

(d) previous conduct and activities in business and financial matters.

(5) Every person who—

(a) applies for a licence shall notify the Commission forthwith of any change in the

information supplied in the application; and

(b) contravenes this subsection commits an offence.

Anguilla

(1) Every application for a licence shall be filed with the Commission in the form andInsurance Act R.S.A. c. I16

15/12/2004 11

(6) The Commission may require an applicant to provide additional information or

documentation that it considers necessary to determine the application.

Payment of annual fee

6.

currency of the licence pay to the Commission the annual fee prescribed in respect of each class of

licence held.

(2) Without prejudice to the foregoing provisions of this section, if the annual fee referred to

in subsection (1) is not paid by the holder of a current licence on or before every 15th day of January

during the currency of the licence, the unpaid annual fee may be sued for by the Commission by

action as a civil debt and the Commission may by regulation order the payment of any penalties

accrued in respect of the late payment of the fee.

(3) The Commission may suspend or revoke a licence if the licence holder fails to pay the

prescribed annual fee together with the appropriate late payment penalty in full on or before 30th June

in the year in which the annual fee is due.

(1) Every holder of a current licence shall on or before every 15th day of January during the

Use of the word “insurance”, etc.

7.

(a) uses or continues to use the words “insurance”, “assurance”, “indemnity”,

“guarantee”, “underwriting”, “reinsurance”, “surety”, “casualty” or any other word

which in the opinion of the Commission connotes insurance business or any of their

derivatives in English or in any other language in the description or title under which

he carries on business in or from within Anguilla; or

(b) makes or continues to make any representation in any billhead, letter, letterhead,

circular, paper, notice, advertisement or in any manner whatsoever that he is carrying

on insurance business;

commits an offence.

(2) The Commission may suspend or revoke the licence of any person who carries on

insurance business, or acts as an insurance manager, an insurance broker, an insurance agent, an

insurance sub-agent or a principal representative (insurance) if the person carries on their business

under a name which is—

(a) identical with that of any other person, company, firm or business house whether

within Anguilla or not, or which so nearly resembles that name as to be calculated to

deceive;

(b) calculated to falsely suggest the patronage of or connection with some person of

authority whether within Anguilla or not;

(c) calculated to falsely suggest that such person has a special status in relation to or

derived from the Government of Anguilla, or has the official backing of or acts on

behalf of the Government of Anguilla or of any department or official thereof or is

recognised in Anguilla as a national insurer, insurance broker, insurance agent or

insurance manager; or

R.S.A. c. I16

(1) Any person who, not having the approval of the Commission or being a licensee—Insurance Act Anguilla

12 15/12/2004

(d) calculated to falsely suggest that the licensee is carrying on insurance business in a

different category from that in respect of which he is licensed.

General requirements for licensed insurers

8.

maintain in a bank in Anguilla, which holds a domestic licence, funds in cash, short-term securities or

other realisable investments approved by the Commission, the total value of which shall at least equal

the total of its—

(a) unearned premium reserve;

(b) outstanding claims reserve;

(c) reserve for claims incurred but not reported; and

(d) unexpired risks reserve.

(2) The Commission may require an approved external insurer to place with the Commission

an interest bearing deposit to meet existing and future liabilities for a period to be determined by the

Commission. The amount of the deposit will not exceed 40% of its annual premium income net of reinsurance

premiums with respect to each class of insurance undertaken.

(3) Every contract of domestic insurance business shall be subject to the jurisdiction of the

courts of Anguilla, notwithstanding any provision to the contrary contained in such contract or in any

agreement related to such contract. Every licensed insurer shall nominate one person resident in

Anguilla approved by the Commission who is authorised to accept on its behalf service of process in

any legal proceedings on behalf of such insurer, and any notices required to be served on it.

(4) Licensed insurers may only carry on insurance business in or from within Anguilla in

accordance with the information given in their licence applications and in accordance with the

provisions of the licence granted. Any proposed change in the nature of such business requires the

prior approval of the Commission. Such insurers shall furnish annually to the Commission a

certificate of compliance with this provision, in the prescribed form, signed by an independent auditor

approved by the Commission, by a licensed insurance manager or by such other person as the

Commission may approve.

(5) Every licensed insurer shall prepare annual accounts in accordance with generally

accepted accounting principles acceptable to the Commission, audited by an independent auditor

approved by the Commission except that the Commission may, in writing, exempt any licensed

insurer from the provisions of this subsection or part thereof.

(6) Every insurer licensed under Class ‘A’ other than an approved external insurer, who is

carrying on general business shall, in addition to the requirement in subsection (5), prepare annually a

financial statement in the prescribed form, certified by an independent auditor approved by the

Commission, to enable the Commission to be satisfied as to its solvency.

(7) Every insurer licensed under Class ‘A’ and Class ‘B’, excepting an approved external

insurer, a Class ‘B’ Insurers Group Licence and a Class ‘B’ Insurers Single Licence, who is carrying

on long-term business shall, in addition to subsection (5), prepare annually an actuarial valuation of

its assets and liabilities other than business written on owners and affiliates of the insurance company

Anguilla

(1) A licensee undertaking domestic insurance business shall in respect of its general businessInsurance Act R.S.A. c. I16

15/12/2004 13

certified by an actuary approved by the Commission, so as to enable the Commission to be satisfied

as to its solvency and furthermore—

(a) every such insurer carrying on both long-term business and general business pursuant

to section 3(5) shall keep separate accounts in respect of its long-term business;

(b) (i) all receipts by any such insurer of funds in respect of its long-term business shall

be placed in a separate long-term business fund, and

(ii) payments from the said long-term business fund shall not be made directly or

indirectly for any purpose other than those of the insurer’s long-term business,

except insofar as such payments can be made out of any surplus disclosed on an

actuarial valuation and certified by an actuary approved by the Commission to be

distributable otherwise than to policy holders; and

(c) every such insurer carrying on long-term business may establish any number of

separate accounts in respect of contracts that it issues providing—

(i) annuities on human life, and

(ii) contracts of insurance on human life;

with separate and distinct assets for each separate account and such separate account shall be kept

segregated one from the other and independent of all other funds of the insurer, and, notwithstanding

any other written law to the contrary, are not chargeable with any liability arising from any other

business of the insurer.

(8) Every insurer, other than an approved external insurer or an insurer who maintains

permanently in Anguilla its principal office and staff, shall appoint an insurance manager and shall

maintain permanently at a designated principal office in Anguilla, or some other location approved by

the Commission, full and proper records of its business activities.

(9) Every insurer other than an approved external insurer carrying on business other than

insurance business shall keep separate accounts in respect of its insurance business and shall

segregate the assets and liabilities of its insurance business from those of its other business.

(10) The Commission may prescribe that any insurer shall not, without the specific approval of

the Commission, make investments of a specified class and may in that case require such insurer to

realise investments of that class within such period as may be prescribed.

(11) No insurer shall without the prior approval of the Commission—

(a) amalgamate with or acquire an ownership interest in any one or more insurers or in

any other person; or

(b) other than in the normal course of insurance business, transfer its insurance operations

or a part thereof or accept transfer of the insurance operations or a part thereof from

another insurer.

(12) An insurer licensed under Class ‘B’ may not carry on domestic business except to the

extent that such business forms a minor part of the international risk of a policy holder whose main

R.S.A. c. I16

Insurance Act Anguilla

14 15/12/2004

activities are in territories outside Anguilla. Any such insurer shall apply to the Commission in

writing giving full particulars of any domestic business to be so carried on by the insurer.

(13) Every licenced insurer shall maintain a solvency margin equal to or greater than the

margin specified in Regulations or in an amount specified by the Commission and shall report

immediately to the Commission when such margin falls below the required level.

(14) Every insurer shall maintain reserves in an amount equal to or greater than the reserves

specified in Regulations and shall report immediately to the Commission when such reserves fall

below the required level.

(15) A licensed insurance broker may apply to the Commission to obtain a special dispensation

to place a policy or contract of domestic business with one or more insurers unlicensed in Anguilla

where—

(a) the said insurers have not been refused a licence under this Act;

(b) the said insurers are approved by the Commission as being of sound reputation;

(c) the said insurance broker can demonstrate to the satisfaction of the Commission an

evident need (in terms of additional capacity or policy coverage, or otherwise) that the

business be so placed;

and such dispensation, if granted, shall be subject to review at such intervals, if any, as the

Commission may specify when granting the dispensation and there shall be no appeal against the

refusal of any such dispensation or renewal thereof and subsection (3) shall apply to a policy placed

under this subsection.

General requirements for other licensees

9.

insurance business being long-term or general, is deemed for the purpose of this Act to be acting as an

insurance broker.

(2) The Commission may require a licensed insurance broker to maintain in force professional

indemnity insurance in respect of his insurance broking activities for an indemnity of not less than

$100,000 for any one loss, or such other figure as may be prescribed by the Commission. Such

professional indemnity insurance shall extend to include the activities on behalf of the broker or of his

sub-agents, if any. In the event that such professional indemnity insurance is withdrawn, or

cancelled, or the said insurance is not renewed, the said broker shall immediately notify the

Commission and shall forthwith cease to solicit further insurance business until such professional

indemnity insurance has been reinstated or replaced.

(3) A licensed insurance agent shall provide evidence satisfactory to the Commission of a

power of attorney, agency agreement or guarantee satisfactory to the Commission, between the agent

and the insurer for whom such agent acts. Such power of attorney, agency agreement or guarantee

shall extend to include the activities on behalf of the insurer and the agent or his sub-agents, if any. In

the event that such power of attorney, agency agreement or guarantee is withdrawn or such agreement

is determined the said agent shall immediately notify the Commission and shall forthwith cease to

solicit further insurance business until such power of attorney or guarantee has been reinstated.

Anguilla

(1) An insurance agent, who acts on behalf of more than one insurer in respect of one class ofInsurance Act R.S.A. c. I16

15/12/2004 15

(4) A licensed insurance sub-agent may not solicit or carry on insurance business on behalf of

more than one insurance agent, or on behalf of more than one insurance broker. If power of attorney,

agency agreement or guarantee, as the case may be, referred to in subsection (3) is for any reason

withdrawn from the said sub-agent, then the licence of the said sub-agent is

such time as such professional indemnity insurance, power of attorney, agency agreement or

guarantee, as the case may be, is reinstated.

(5) A licensed insurance manager or a licensed principal representative (insurance) shall use

his best endeavours to carry on business only with insurers of sound reputation. In the event that such

insurance manager or a licensed principal representative (insurance) feels cause for concern regarding

the probity or soundness of any insurer or re-insurer for whom or with whom he is carrying on

business, he shall report the same forthwith to the Commission. In the event that either party to an

agreement relating to representation between a Class ‘B’ insurer and an insurance manager or

principal representative (insurance) intends to terminate the same, 60 days written notice of such

proposed termination shall be given to the Commission by such insurance manager or principal

representative (insurance).

(6) A licensed insurance manager or a licensed principal representative (insurance) who also

carries on insurance business as an insurance broker or as an insurance agent is required to be

licensed in respect of each such activity.

ipso facto suspended until

Annual returns by licensed insurers

10.

Commission within 6 months of the end of its financial year the following returns—

(a) a certificate of solvency or of compliance with insurance legislation specifically

enacted in the country or place where the said external insurer is constituted for its

supervision and regulation, or some equivalent document acceptable to the

Commission;

(b) if the said insurer has a branch or other subsidiary activity in Anguilla, written

confirmation that the said insurer accepts responsibility for all contracts issued by

such branch or subsidiary activity and also for all acts, omissions and liabilities of

such branch or subsidiary activity;

(c) in respect of the said insurer’s general domestic business, such information as the

Commission may require concerning the availability of funds for prompt settlement of

claims under such business;

(d) in respect of the said insurer’s long term domestic business, such information as the

Commission may require concerning the investment of premium income received by

the said insurer from such business;

(e) details of reinsurance contracts and arrangements in respect of domestic insurance

business;

(f) if the said insurer is licensed under Class ‘A’ for long term business, an actuarial

valuation of its assets and liabilities certified by an actuary approved by the

Commission, in accordance with section 8(7);

R.S.A. c. I16

(1) Each approved external insurer who is carrying on domestic business shall furnish to theInsurance Act Anguilla

16 15/12/2004

(g) a list of insurance agents and insurance brokers who have the said insurer’s authority

to effect domestic business on its behalf;

(h) written confirmation that the information set out in the application for the said

insurer’s licence, as modified by subsequent notifications of changes in accordance

with section 5(5)(a), remains correct, and gives a full and fair picture of the said

insurer’s business;

(i) details of insurance business being undertaken in Anguilla in the form prescribed;

(j) audited annual accounts as required under section 8(5).

(2) Every insurer licensed under Class ‘A’ other than an approved external insurer shall

furnish to the Commission within 6 months of the end of its financial year the following annual

returns—

(a) the audited annual accounts as required under section 8(5);

(b) a certificate of compliance as required by section 8(4);

(c) if the said insurer is licensed under Class ‘A’ for general business, a financial

statement in the prescribed form, certified by an independent auditor approved by the

Commission, in accordance with section 8(6);

(d) if the said insurer is licensed under Class ‘A’ for long-term business, an actuarial

valuation of its assets and liabilities, certified by an actuary approved by the

Commission, in accordance with section 8(7);

(e) details of re-insurance contracts and arrangements in respect of domestic insurance

business;

(f) a list of insurance agents and insurance brokers who have the insurer’s authority to

effect domestic business on its behalf.

(3) Each insurer who holds a licence under Class ‘B’ shall furnish to the Commission within 6

months of the end of its financial year an annual return in the form prescribed and including—

(a) the audited annual accounts as required under section 8(5);

(b) a certificate of compliance as required under section 8(4);

(c) such other information as the Commission may require in order to satisfy itself as to

the solvency of the insurer and that the such insurer is complying with this Act.

(4) Returns shall be in the form and manner and contain such information as may be

prescribed.

(5) Regulations may be prescribed to include additional returns or additional information to be

submitted by licensees under this section.

Anguilla

Insurance Act R.S.A. c. I16

15/12/2004 17

(6) When a licensee changes its auditor, the Commission may require the former auditor to

explain the circumstances responsible for such change.

Annual returns by other licensees

11.

end of each calendar year the following returns in respect of his domestic business—

(a) confirmation in writing that the said agent in respect of a class of insurance business is

acting for one insurer only and the name of that insurer;

(b) evidence of the existence of a power of attorney, agency agreement or guarantee;

(c) a list of the sub-agents, if any, authorised by the said agent to solicit domestic business

on his behalf and on behalf of the insurer whom he represents; and

(d) confirmation in writing that the information set out in the application for the said

agent’s licence, as modified by subsequent notifications of changes in accordance

with section 5(5)(a), remains correct and gives a full and fair picture of the said

agent’s business.

(2) Every licensed insurance broker shall furnish to the Commission within 3 months of the

end of his financial year the following information in respect of his domestic business—

(a) a list of all insurers for whom the said insurance broker is authorised to act, and the

premium income to each such insurer during the last financial year;

(b) evidence of the existence of professional indemnity insurance in respect of his

activities as an insurance broker as required under section 9(2);

(c) a list of the sub-agents, if any, authorised by the said insurance broker to solicit

domestic business on his behalf and on behalf of the insurers whom he represents; and

(d) confirmation in writing that the information set out in the application for the said

insurance broker’s licence, as modified by subsequent notifications of changes in

accordance with section 5(5)(a), remains correct and gives a full and fair picture of

the said insurance broker’s business.

(3) Every licensed insurance sub-agent shall furnish to the Commission before the renewal of

his licence—

(a) confirmation in writing that the said sub-agent is acting for one insurance agent only,

or for one insurance broker only, and the name of such insurance agent or insurance

broker; and

(b) confirmation in writing that the information set out in the application for the said subagent’s

licence, as modified by subsequent notifications of changes in accordance

with section 5(5)(a), remains correct and gives a full and fair picture of the said subagent’s

insurance activities.

R.S.A. c. I16

(1) Every licensed insurance agent shall furnish to the Commission within 3 months of theInsurance Act Anguilla

18 15/12/2004

(4) Every licensed insurance manager shall furnish to the Commission within 3 months of the

end of his financial year the following information—

(a) a list of all insurers for whom the said insurance manager acts; and

(b) confirmation in writing that the information set out in the application for the said

insurance manager’s licence, as modified by subsequent notifications of changes in

accordance with section 5(5)(a), remains correct and gives a full and fair picture of the

said insurance manager’s activities.

(5) Returns shall be in the form and manner and contain such information as may be

prescribed.

(6) Regulations may be prescribed to include additional returns or additional information to be

submitted by licensees under this section.

Shares not to be held

12.

jointly with an associate, or dispose of 10% or more of the issued share capital of a company, which

is a licensee under the Act, without the prior approval of the Commission.

(2) In respect of a licensee whose shares or the shares of whose parent holding company, if

any, are publicly traded on a stock exchange approved by the Commission, no person may acquire,

hold, whether legally or beneficially, directly or indirectly, or dispose of 25% or more of the issued

share capital of a company, which is a licensee under the Act, without the prior approval of the

Commission.

(3) (a) A licensee; or

(b) a person holding a significant interest, who disposes of shares that would result in his

no longer holding a significant interest; and

(c) a person acquiring a significant interest;

who does not seek the prior approval of the Commission under subsections (1) and (2) commits an

offence.

(4) In subsections (1) and (2) the reference to shares being transferred or disposed of includes

not only the holding, transfer or disposal of the legal interest in the shares but also the holding,

transfer or disposal of any beneficial interest in the shares.

(5) The Commission may refuse to grant approval under subsections (1) and (2) if it is of the

opinion that a person seeking to hold a significant interest is not a fit and proper person.

, issued or transferred without the approval of the Commission(1) No person may acquire, hold, whether legally or beneficially, directly or indirectly, or

Number and appointment of directors

13.

(2) No appointment of a director or other senior officer of a licensee shall be made without the

prior approval of the Commission, unless the licensee is exempted in writing by the Commission.

Anguilla

(1) A licensee, which is a company, shall have not less than 2 directors.Insurance Act R.S.A. c. I16

15/12/2004 19

(3) The Commission may refuse to grant approval under subsection (2) if it is of the opinion

that a person seeking appointment is not a fit and proper person.

Cease and desist orders

14.

(a) has committed, is committing, or is about to commit, an act that is an unsafe or

unsound practice in conducting the business of its licence;

(b) has pursued, is pursuing, or is about to pursue, a course of conduct that is an unsafe or

unsound practice in conducting the business of its licensee;

(c) is conducting business for which it does not hold the appropriate licence; or

(d) is carrying on insurance business without a licence;

the Commission may direct the licensee—

(e) to cease or refrain from committing the act or pursuing the course of conduct; and

(f) to perform such acts as in the opinion of the Commission are necessary to remedy or

ameliorate the situation; or

issue a directive under section 31 of the Financial Services Commission Act.

(2) A person who, without reasonable cause, fails to comply with a directive given by the

Commission pursuant to subsection (1) is guilty of an offence and is liable on summary conviction to

a fine of $10,000 and on conviction on indictment to a fine of $100,000, and if the offence of which

he is convicted is continued after conviction he commits a further offence and is liable to a fine of

$10,000 for every day on which the offence is so committed.

(1) Where the Commission is of the opinion that a person—

Examination of a licensee

15.

(a) have access to and may take copies of all books and records and any documents in

order to examine the affairs or business of any licensee or other person carrying on, or

who has at any time carried on insurance business for the purpose of satisfying itself

that this Act and Regulations have been or are being complied with and the licensee is

in a sound financial position and is carrying on his business in a satisfactory manner;

(b) examine all annual returns submitted to the Commission under sections 10 and 11;

(c) request such other information as may be required to assess the business being

undertaken by the licensee and its financial situation.

The Commission shall—

Enforcement action

16.

with the modifications specified in this section.

(2) For the purposes of Part 5 of the Financial Services Commission Act—

R.S.A. c. I16

(1) Section 28 of the Financial Services Commission Act applies to licensees under this ActInsurance Act Anguilla

20 15/12/2004

(a) an insurer is deemed to be insolvent if the total value of its assets does not exceed the

total amount of its liabilities by at least the minimum margin of solvency that it is

required to maintain under section 8(13); and

(b) “customer”, includes a policyholder.

(3) In addition to the grounds specified in section 28(1) of the Financial Services Commission

Act, the Commission may take enforcement action against a licensed insurer if the Commission is of

the opinion that the licensee’s insurance business, or any part of its insurance business, is not being

carried on in accordance with sound insurance principles.

(4) Where the Commission is entitled to take enforcement action against a licensed insurer

under section 28 of the Financial Services Commission Act, in addition to the powers exercisable

under that section, the Commission may arrange for the compulsory transfer of the obligations of the

licensee, who is or appears likely to become unable to meet its obligations as they fall due, to another

insurer that accepts the transfer.

(5) Where the Commission is entitled to take enforcement action against a licensed insurer

under section 28 of the Financial Services Commission Act it may, in addition to the directives

specified in section 31 of the Financial Services Commission Act, issue one or more of the following

directives to the insurer—

(a) not to vary any existing contracts of insurance;

(b) to limit to a specified amount the aggregate premiums to be received by it, whether

net or gross of reinsurance premiums;

(c) to refrain from making investments of a specified class or description;

(d) impose conditions, or further conditions, as the case may be, upon the licence and

amend, suspend or revoke any such condition;

(e) to cause an actuary or such other person as may be specified by the Commission, at

the cost of the licensee, to undertake an investigation into the insurer’s financial

position and to submit a report to the Commission.

Surrender of licence

17.

(a) has ceased to carry on or has not commenced the business in respect of which the

licence was granted; or

(b) is being wound up voluntarily and produces evidence that it is solvent and able

forthwith to repay all its creditors;

and the Commission may thereupon approve the surrender and cancel the licence.

A licensee may apply to the Commission to surrender its licence if it—

Protected premium accounts

18.

Anguilla

(1) As used in this section, and unless the context requires otherwise—Insurance Act R.S.A. c. I16

15/12/2004 21

(a) “creditor” means a person to whom an obligation is owed and includes any person

who alleges or pursues a claim or cause of action in behalf of or in the name of a

creditor or for the ultimate benefit of a creditor;

(b) “intent to defraud” means an intention of a policy holder wilfully to defeat an

obligation owed to a creditor;

(c) “long-term premium” means any money, money’s worth or property (including

existing policies of insurance or annuities) that is paid or transferred to an insurer

licensed under this Act as, or held by such insurer as security for payment of a

bona fide

which premium is paid in connection with—

(i) an annuity on human life,

(ii) contract of insurance on human life,

(iii) a policy of insurance containing features of both subsections (i) and (ii);

(d) “obligation” means an obligation or liability due to a specific creditor that existed on

or before the date of a transfer of a long-term premium to a protected premium

account and of which the policy holder had actual knowledge or notice;

(e) “protected policy holder” means, for purposes of this section, a person who makes a

contract with an insurer for a policy of long-term insurance and who pays or is

obligated under that contract or an associated contract or policy to pay a longterm

premium; and

(f) “protected premium account” means an account or sub-account established by an

insurer with an independent custodian to hold one or more long-term premiums

paid or to be paid, or to secure payment to the insurer, which account is from or

accounted for by the insurer separate from the general operating accounts of the

insurer and from any protected premium accounts established for other unrelated

policy-holders.

(2) This section applies to—

(a) any action or proceedings in any jurisdiction relating to the transfer or payment of

money or other property, or the exchange of an existing policy, as a long-term

premium payment to an insurer licensed hereunder in return for a contract or policy of

long-term insurance, whether the money or property so transferred has its

or outside Anguilla after such transfer or disposition, so long as the transfer, payment

or exchange of policies takes place after 1st October 2004; and

(b) any action or proceeding by a creditor alleging fraudulent conveyance, fraud or a

cause of action sounding in fraud against a protected policy holder who has paid a

long-term insurance premium to an insurer, and/or against the insurer to which or for

whose benefit such premium was paid, to the exclusion of any other remedy, principle

or rule of law of any jurisdiction, whether provided by statute or based on principles

of equity or the common law.

R.S.A. c. I16

premium under a contract of long-term insurance issued by that insurer,situs withinInsurance Act Anguilla

22 15/12/2004

(3) For purposes of this section, a premium shall be deemed paid when it is transferred to an

insurance agent or broker, or when an existing contract or policy is exchanged in lieu of payment of a

premium.

(4) No creditor of a protected policy-holder who has paid a long-term premium to an insurer

may set aside or seek to set aside a transfer or payment of any long-term premium by the protected

policy-holder to that insurer if such premium, less commissions charged or paid by or to the insurer,

is placed in a protected premium account prior to or following such transfer unless it is determined, in

a final order or judgment by the Court, that the transfer or payment of the premium by the protected

policy holder was made with the principal intent to defraud that creditor.

(5) For purposes of this section, the onus of proof of the protected policy holder’s intent to

defraud a creditor lies on the creditor.

(6) Notwithstanding anything to the contrary in this Act, no action or proceedings may be

commenced in any jurisdiction to rescind, avoid, set aside or divert any payments of a long-term

premium to which this section applies later than 3 years after the date of transfer or payment of that

premium, or later than 3 years after the date of transfer or payment of the first premium, if the

contract or policy calls for payments in instalments.

(7) A policy holder shall not have imputed to him any intent to defraud a creditor by reason

that the policy holder—

(a) is an owner, director or officer of the insurer to which the protected premium was

paid; or

(b) the policy holder is the settlor, trustee, protector or a beneficiary of a trust which is a

beneficiary under the policy as to which a protected premium account is maintained.

(8) This section shall apply to actions, proceedings and arbitrations against protected policy

holders, beneficiaries of policies with protected policy holders, insurers, and each of their officers,

directors, employers and agents.

(9) So long as a protected premium account maintained under this section is accounted for by

the insurer separate from every other such account, and independent of all other funds of the insurer,

and notwithstanding the provisions of any law or principle of common law or equity to the contrary,

no protected premium account or the insurer which owns or establishes such account shall be

chargeable with or liable for—

(a) any liability, obligation or loss arising from any general or other business of the

insurer maintaining such account;

(b) the claims of any creditor or of any person, except as provided in this section or

expressly in the policy as to which such protected premium account is maintained; or

(c) any liability, obligation or loss arising from or primarily relating to any other policy

holder of the insurer, whether that other policy holder is entitled to the protections of

this section or not.

(10) Neither the cash, liquidation or residual value under any policy as to which a protected

premium account is maintained, nor dividends or other income paid to, by or for any such account,

Anguilla

Insurance Act R.S.A. c. I16

15/12/2004 23

shall be subject to any lien, charge, charging order, encumbrance, injunction, attachment or

sequestration by any court except to the extent provided in a final order under subsection (4) herein.

(11) No residual interest of an insurer, or any interest of a beneficiary in or under a policy, or

policy, to which this section applies may be subject to any injunction, lien, charge, charging order,

encumbrance, attachment or sequestration.

(12) A long-term premium paid by or for an insurer into a protected premium account shall be

conclusively presumed to be a premium payment for insurance, and no protected premium account

shall be construed to be a trust account or give rise to any inference that the relationship between the

policy holder and the insurer is that of beneficiary and trustee, principal and agent, or broker and

customer.

(13) A transfer of a long-term premium into a protected premium account may be rescinded or

set aside only as provided in this section and then only to the extent necessary to satisfy the actual

obligation to the creditor at whose instance the transfer has been set aside.

Additional requirements for foreign insurers carrying on long term business

19.

from its general business accounts or from those of any of its protected premium accounts, to another

insurer or re-insurer to insure or reinsure the life of any life insured by the insurer, the proceeds of the

insurance or reinsurance for which such premiums were paid shall first be applied to provide the

benefits specified in the policy issued by the insurer and shall not be available for any other purpose

unless and until the insurer’s obligation to pay such benefits has been met in full.

(2) Notwithstanding any law to the contrary, where any person shall acquire a policy of the

type referred to in section 18(1)(c)(i), (ii) or (iii)and issued by an insurer of which he, or a trust settled

by him, is the protected policy holder, the said policy and the proceeds thereof including periodic or

non-periodic payments or any refund or death benefit shall inure exclusively to the benefit of the

protected policy holder and/or the person for whose use and benefit such policy, proceeds, payments

or refund or death benefit is designated under the policy and all the foregoing shall be exempt from

the claims of any creditor of the protected policy holder and/or such person and any creditor of the

estate of the protected policy holder and/or such person.

(3) Notwithstanding any law to the contrary, where any person shall die leaving a policy

referred to in section 18(1)(c)(i), (ii) or (iii) and issued on his life by an insurer, the death proceeds

payable under said insurance shall inure exclusively to the benefit of the person for whose use and

benefit such insurance is designated in the policy in effect on death, and the said proceeds shall be

exempt from the claims of any creditor of the insured, his estate, of any beneficiary under the policy

or his estate, and of the protected policy holder or estate of the protected policy holder.

(4) When a policy referred to in section 18(1)(c)(i), (ii) or (iii) is effected by any person on his

own life or on another life in favour of some person other than himself or, if such a policy is assigned

or in any way made payable to any such person, the lawful beneficiary or assignee thereof, other than

the insured or the person so effecting such policy or executors or administrators of such insured or the

person effecting such policy, shall be entitled to its proceeds and avails against the creditors and

representatives of the insured and of the person effecting such policy whether or not the right to

change the beneficiary is reserved or permitted and whether or not the policy is made payable to the

person whose life is insured or the measuring life under an annuity, if the beneficiary or assignee shall

R.S.A. c. I16

(1) Notwithstanding any law to the contrary, where an insurer has paid premiums, whetherInsurance Act Anguilla

24 15/12/2004

predecease such person; and the company issuing such policy shall be discharged of all liability

thereon by payment of its proceeds in accordance with its terms.

(5) Notwithstanding any law to the contrary, unless a policy referred to in section 18(1)(c)(i),

(ii) or (iii) is effected for the benefit of such creditor, the cash surrender value of a policy issued by an

insurer shall not be attached, garnished or subject to any sort of legal process in favour of any creditor

of the protected policy holder, the insured, the estates of any protected policy holder or insured, or of

any beneficiary or the estate thereof under the policy or of the beneficiary of any trust which is the

protected policy holder of a policy referred to in section 18(1)(c)(i), (ii) or (iii) and issued by an

insurer.

(6) Policies referred to in section 18(1)(c)(i), (ii) or (iii) and issued by an insurer, which by

their terms are subject to amendment, assignment, modification, alteration, novation, cancellation or

redemption by the protected policy holder or the insurer, shall not be subject to amendment,

assignment, modification, alteration, novation, cancellation or redemption during any period during

which the protected policy holder is acting under duress imposed by any lawful authority or otherwise

other than a lawful authority in Anguilla.

(7) In the case where a payment or policy amendment, assignment, modification, alteration,

novation, cancellation or redemption is made by an insurer or by any person acting on its behalf in

contravention of this section, such insurer or person acting on its behalf shall be guilty of an offence.

In addition, an insurer and any person acting on its behalf that is found guilty shall be liable in a civil

action for damages, jointly and severally, to the protected policy holder, beneficiary, or any other

person to whom the payment should have been held to benefit under this section, for the amount of

the payment made in contravention of this section, or the value of any policy amendment, assignment,

modification, alteration, novation, cancellation or redemption, plus any other reasonably foreseeable

damages incurred as a result of the contravening act, including but not limited to reasonable

attorney’s fees incurred by the person or persons so damaged; but in no case shall such damages be

awarded in excess of $100,000.

(8) It shall be a defence to a charge under this section that the company or the person who

acted therefore reasonably believed that the person who requested and/or ultimately received the

payment was entitled to the payment under this section and the policy and was acting free of duress or

order imposed upon him by any lawful authority or otherwise and a company or the person who acted

therefore, charged with the offence proves that the company or such person had such a reasonable

belief by admission into evidence of the inquiries made or caused to be made, by the company or the

person who acted therefore, of—

(a) the person who requested and/or ultimately received the payment;

(b) the protected policyholder;

(c) the person whose life is insured or the measuring life under an annuity contract; and

(d) at least one other person, which may be a commercial agency, that could reasonably be

expected to know or to discover if the person who requested and/or ultimately

received the payment was entitled to the payment under this section and the policy

and was acting under duress or order imposed upon him by any lawful authority or

otherwise.

Anguilla

Insurance Act R.S.A. c. I16

15/12/2004 25

Non-application, etc.

20.

Businesses, Occupations and Professions Licensing Act.

(2) No company which is licensed pursuant to the Company Management Act or trust

company which is licensed pursuant to the Trust Companies and Offshore Banking Act is required to

be licensed as a principal representative (Insurance).

(3) This Act has no application to or effect upon—

(a) governmental pension arrangements;

(b) the validity of policies of insurance in existence at 1st October 2004;

(c) the Friendly Societies Act.

(4) Contracts of insurance executed for or in connection with the foreign insurance business

of a licensed insurer under this Act shall be exempt from stamp duty.

(1) No company which is licensed under this Act is required to be licensed under the Trades,

Regulations

21.

(a) prescribing anything by this Act required to be prescribed;

(b) exempting any person or class of persons or business or class of business from any

provision of this Act;

(c) prescribing forms to be used;

(d) prescribing the format and content of any returns to be made under this Act;

(e) prescribing capital and liquidity margins, solvency ratios, reserves and technical

provisions to be maintained by licensees under this Act;

(f) prescribing the payment of fees and penalty fees due under this Act or amending the

fees;

(g) prohibiting certain investments or disallowing certain assets for the purposes of any

provision of this Act;

(h) providing for the valuation and safe-keeping of assets;

(i) prescribing standards of corporate governance and internal controls, to which

licensees shall be subject;

(j) providing for such matters as may be necessary or convenient for carrying out or

giving effect to this Act and its administration.

(2) Regulations may make different provisions in relation to different persons, circumstances

or cases.

R.S.A. c. I16

(1) The Governor may, on the advice of the Commission, make regulations—Insurance Act Anguilla

26 15/12/2004

Gazette

22.

published in the

NoticesThe Commission shall cause notice of the issue, revocation or suspension of a licence to beGazette.

Offences

23.

he does not believe (the onus of proof of his belief being upon him) is guilty of an offence and liable

on summary conviction to a fine of $10,000 and to imprisonment for 2 years.

(2) A person who contravenes or fails to comply with any of the provisions of this Act or any

regulations made hereunder commits an offence and, except where provision by or under which the

offence is created provides the penalty to be imposed, is liable on summary conviction to a fine of

$5,000 or to imprisonment for 1 year or to both.

(1) A person who, for any purpose of this Act, makes any representation in the truth of which

Transitional provisions

24.

deemed to have been granted a licence under this Act subject to such terms and conditions as may

have been imposed on the granting of the licence under that Act.

A person holding a licence under the Insurance Act immediately before 1st October 2004 is

Citation

25.

This Act may be cited as the Insurance Act, Revised Regulations of Anguilla, Chaper I16.___________

 

Leave a Reply