Regulation of the General Insurance Industry
The local insurance industry is governed by the Insurance Act 1969, and regulated by the Office of the Registrar of Insurance Companies (ORIC), with the Minister responsible for insurance matters having the ultimate responsibility for overseeing the insurance industry in The Bahamas.
Presently, the insurance industry falls under the Ministry of Finance.
It is the Office of the Registrar of Insurance Companies that has the primary responsibility to protect the interests of policyholders through the supervision of the insurance industry operating in The Bahamas.
According to the statistics produced by the ORIC as of 2001, the number of registered insurers in the property and casualty class amounted to some 41 and the life and health industry some 15. The total of intermediaries amounts to 55, consisting of agents and brokers.
However of these there are:
- Eight local companies registered in the general class and
- Some 24 registered and active agents and brokers that are responsible for the majority of local transactions.
- Some 1,000 people employed in the general sector.
The Insurance Act 1969 restricts insurers and intermediaries from carrying on insurance business in or from within The Bahamas unless they are registered as such in accordance with the provisions of the Act.
The Act also sets out:
- The financial requirements of insurers
- Registration fees for insurers and intermediaries
- Business license fees for insurers and intermediaries are dealt with under the Business License Act 1980 e.g., for insurers 3% of gross written premium.
Legal Matters
Revised Domestic Insurance Act
A draft bill to replace the Insurance Act of 1969 has been prepared for Cabinet to debate after consultation with the local life and other than life representatives. The revised act is intended to strengthen the protection given to policyholders by:
- Increasing the capital and solvency requirements of insurance companies
- Expanding the regulatory framework
- Establishing a supervisory authority
- Regulating insurance intermediaries
Amendment to Road Traffic Act
In October of 2004 the Road Traffic Act 1958 was amended to change the statutory requirement from unlimited third party liability in respect of bodily injury to $2.5 million per person, and $30 million any one event.
This amendment has been introduced in part because local insurers have been advised by their motor reinsurers, in this respect, they will no longer provide unlimited protection, and their exposure has to be capped.
