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I Assent Duncan Taylor Governor. 25th April, 2013 A LAW TO AMEND THE INSURANCE LAW, 2010 TO CREATE A NEW CLASS OF INSURER; TO PERMIT THE REGISTRATION OF PORTFOLIO INSURANCE COMPANIES; AND FOR INCIDENTAL AND CONNECTED PURPOSES ENACTED by the Legislature of the Cayman Islands. 1. (1) This Law may be cited as the Insurance (Amendment) Law, 2013. (2) This Law shall come into force on such date as may be appointed by Order made by the Governor in Cabinet and different dates may be appointed for different provisions of this Law and in relation to different matters. 2. The Insurance Law, 2010, in this Law referred to as the \u201cprincipal Law\u201d, is amended in section 2 by inserting in the appropriate alphabetical sequence the following definitions - \u201c\u201cclass B (iv) insurer\u201d means a holder of a valid class B insurer licence referred to in section 4(3)(b)(iv); \u201cgross premium written\u201d means total written premiums prior to any deductions; \u201cnet earned premium\u201d means net written premium applicable to the expired part of the policy period or reinsurance agreement period; \u201cnet written premium\u201d means gross premium written, less reinsurance premium ceded; and \u201creinsurance premium ceded\u201d means the premium ceded to reinsurers;\u201d. Short title and commencement Amendment of section 2 of the Insurance Law, 2010 - interpretation The Insurance (Amendment) Law, 2013 3. The principal Law is amended in section 4 as follows - (a) in subsection (3)(b)(i), by deleting the words \u201cnet premiums written\u201d and substituting the words \u201cnet written premiums\u201d; (b) in subsection (3)(b), by repealing subparagraphs (ii) and (iii) and substituting the following subparagraphs - \u201c(ii) over fifty per cent of the net written premiums will originate from the insurer\u2019s related business; (iii) fifty per cent or less of the net written premiums  will originate from the insurer\u2019s related business and annual net earned premiums are less than sixteen million four hundred thousand dollars; or (iv) fifty per cent or less of the net written premiums  will originate from the insurer\u2019s related business and annual net earned premiums  are equal to or greater than sixteen million four hundred thousand dollars;\u201d; (c) in subsection (4), by repealing paragraph (f) and substituting the following paragraph - \u201c(f) only a person incorporated or reregistered as an exempted company under the Companies Law (2012 Revision) or registered as a foreign company under Part IX of the Companies Law (2012 Revision) or registered by way of continuation as an exempted company under Part XII of the Companies Law (2012 Revision) and that has a minimum of two directors may be licensed as a class B insurer or a class C insurer;\u201d and (d) in subsection (4)(g), by deleting the words \u201cnet premiums written\u201d and substituting the words \u201cnet written premiums\u201d. 4. The principal Law is amended in section 9(4)(b) by inserting after the words \u201ca Class B(iii)\u201d the words \u201cand a Class B(iv)\u201d. 5. The principal Law is amended by inserting after Part 4 the following Part - \u201cPART 4A - Portfolio Insurance Companies Amendment of section 4 - licences Amendment of section 9 - returns required of insurer Insertion of Part 4A - portfolio insurance companies The Insurance (Amendment) Law, 2013 Interpretation in Part 4A (2012 Revision) 28A. (1) In this Part - \u201ccontrolling relevant insurer\u201d means a relevant insurer that controls an exempted company; \u201cexempted company\u201d means an exempted company under the Companies Law (2012 Revision); \u201cnon-voting shares\u201d means shares other than voting shares; \u201cportfolio insurance company\u201d means an exempted company that is not a segregated portfolio company which is registered with the Authority as a portfolio insurance company pursuant to section 28B(2); \u201crelevant insurer\u201d means an insurer, other than a class A insurer, established as a segregated portfolio company; \u201crelevant segregated portfolio\u201d means the segregated portfolio on whose behalf the controlling relevant insurer controls the relevant exempted company; \u201csegregated portfolio company\u201d has the meaning assigned under section 212 of the Companies Law (2012 Revision); \u201ctransfer and assumption\u201d means a transfer of assets and the assumption of liabilities made pursuant to  section 28R(5); and \u201cvoting shares\u201d means the shares which carry the right to vote at general meetings of a company. (2) In this Part, section 2(2)(b) does not apply and an exempted company is only controlled by a relevant insurer and a relevant insurer only controls an exempted company if all of the voting shares issued by the exempted company are held by the relevant insurer on behalf of one of its segregated portfolios. Registration of exempted company as portfolio insurance company 28B. (1)  An exempted company that is controlled by a relevant insurer may make an application in writing to the Authority to register as a portfolio insurance company and in order to be registered and remain registered, the exempted company shall - (a) at the time of making the application and within six months of the end of each financial year during the continuation of the registration, file with the Authority an The Insurance (Amendment) Law, 2013 (2010 Revision) annual declaration, in the form approved by the Authority, declaring - (i) the name of the exempted company which name shall include the letters \u201cPIC\u201d or \u201cP.I.C.\u201d or the words \u201cPortfolio Insurance Company\u201d; (ii) the name of its controlling relevant insurer; and (iii) the names of the directors, managers and officers of the exempted company; (b) at the time of making the application provide to the Authority - (i) the written consent of the controlling relevant insurer to the registration; (ii) a business plan containing the details prescribed; and (iii) the prescribed application fee; and (c) where section 28R(1) applies, at the time of making the application, file with the Authority the documents specified therein. (2) If - (a) an application satisfies the requirements of subsection (1); (b) the director, managers and officers of the exempted company are the same as the director, managers and officers of the controlling relevant insurer or are otherwise persons approved by the Authority as fit and proper persons to be director, managers and officers of a portfolio insurance company; (c) the Authority approves the business plan provided with the application; and (d) the Authority is satisfied that the exempted company will be able to comply with any applicable requirements of the Money Laundering Regulations (2010 Revision), the Authority shall approve the application and issue a certificate of registration to the exempted company as a portfolio insurance company, subject to conditions determined by the Authority for the proper operation and The Insurance (Amendment) Law, 2013 supervision of the portfolio insurance company. No requirement for a licence 28C. With effect from the time it is registered as a portfolio insurance company under section 28B(2), a portfolio insurance company shall be permitted to carry on insurance business without requiring a licence and section 3 does not apply. Continuing obligations 28D. A portfolio insurance company shall - (a) at all times be controlled by a relevant insurer; (b) include in its name the letters \u201cPIC\u201d or \u201cP.I.C.\u201d or the words \u201cPortfolio Insurance Company\u201d; (c) carry on insurance business only in accordance with the information given in its business plan and shall seek the prior written approval of the Authority for any change to the approved business plan; (d) not without the prior written approval of the Authority- (i) open outside the Islands a subsidiary, branch, agency or representative office or change its name; or (ii) where it is conducting insurance business other than long term business, amalgamate with any one or more insurers or other portfolio insurance companies or, other than in the normal course of business, transfer its insurance operations or any part thereof, or accept transfer of the insurance operations or any part thereof from an insurer or portfolio insurance company; (e) maintain a margin of solvency in accordance with the prescribed solvency requirements; (f) maintain adequate arrangements for the The Insurance (Amendment) Law, 2013 management of risks, including the reinsurance thereof where appropriate; (g) maintain capital in accordance with the prescribed capital requirements; (h) maintain an effective system of governance approved by the Authority; and (i) where its controlling relevant insurer is a class B (iii) insurer or a class B (iv) insurer, make its audited financial statements available to insured persons, third party beneficiaries, and any other persons that may be prescribed, on request. Required returns of portfolio insurance company 28E. (1) A portfolio insurance company shall, except as otherwise provided by the Authority in writing and subject to subsection (2), submit to the Authority by way of annual return, within six months of the end of its financial year - (a) unless waived by the Authority, audited financial statements prepared in accordance with internationally recognized accounting standards by an independent auditor approved by the Authority, together with a copy of any prescribed management letter issued by the auditor; (b) an actuarial valuation of its assets and liabilities including loss and loss expense provisions, certified by an actuary approved by the Authority; (c) unless waived by the Authority, certification of solvency prepared by a person approved by the Authority in accordance with the prescribed requirements; and (d) any other information as may be prescribed. (2) A portfolio insurance company that - (a) does not conduct long term business; or (b) conducts insurance business of the type described in section 4(3)(c), The Insurance (Amendment) Law, 2013 is not required to make submissions under subsections (1)(b) or (c). (3) The audited financial statements and actuarial valuation referred to in subsections (1)(a) and (b) shall disclose the standards applied. Limitation as to number of portfolio insurance companies 28F. A relevant insurer shall not control more than one portfolio insurance company on behalf of any relevant segregated portfolio. Directors, managers and officers 28G. (1) A portfolio insurance company shall have a minimum of two directors. (2) The directors, managers and officers of a portfolio insurance company may be the same persons as the directors, managers and officers of the portfolio insurance company\u2019s controlling relevant insurer, the same persons as the directors, officers and managers of another portfolio insurance company which is controlled by the controlling relevant insurer or may be different persons. Non-voting shares 28H. A portfolio insurance company may create nonvoting shares in one or more classes or series and, subject to section 28O(2), may issue non-voting shares of any class or series to any person. Insurance manager, auditor and registered office 28I. (1) A portfolio insurance company shall appoint the same insurance manager as its controlling relevant insurer and maintain, at the insurance manager\u2019s place of business or at another location approved by the Authority, full and proper records of the business activities of the portfolio insurance company sufficient to - (a) explain the transactions of the portfolio insurance company; (b) disclose, with reasonable accuracy, at any time the state of the affairs of the portfolio insurance company; and (c) enable the portfolio insurance company to prepare annual financial statements. (2) Section 20 applies to a portfolio insurance company as if it were a licensee and the reference to The Insurance (Amendment) Law, 2013 (2003 Revision) \u201clicence\u201d in section 20(1)(e)(iv) shall be construed as a reference to registration as a portfolio insurance company under section 28B(2). (3) Section 21 applies to a portfolio insurance company as if it were an insurer and the reference to \u201clicence\u201d in section 21(2)(g)(iv) shall be construed as a reference to registration as a portfolio insurance company under section 28B(2). (4) A portfolio insurance company shall have the same registered office as its controlling relevant insurer and shall be deemed to be an \u201cinsurance company\u201d for the purposes of section 5(5)(d) of the Companies Management Law (2003 Revision). No restrictions or limitation on entering into contract, etc. 28J. (1) Subject to any restrictions or limitations imposed by the Authority or the memorandum and articles of association of a portfolio insurance company, there shall be no restriction or limitation upon a portfolio insurance company entering into any contract, transaction or arrangement with any person including - (a) its controlling relevant insurer acting on behalf of any of its segregated portfolios, including the relevant segregated portfolio; (b) its controlling relevant insurer acting otherwise than on behalf of any of its segregated portfolios; or (c) any other portfolio insurance company. (2) Nothing contained in subsection (1) permits a portfolio insurance company to hold shares in its controlling relevant insurer. Persons which are not an insurance group 28K. A relevant insurer and the portfolio insurance companies which it controls does not constitute an insurance group for the purposes of this Law. Financial year end 28L. A relevant insurer, each of its segregated portfolios and each portfolio insurance company controlled by the relevant insurer shall have the same financial year end. Long term business 28M. (1) Section 17 applies to a portfolio insurance The Insurance (Amendment) Law, 2013 accounts company conducting long term business as if it were a class A insurer, a class B insurer or a class D insurer. (2) Section 29 applies to a portfolio insurance company conducting long term business as if it were an insurer. (3) Subject to subsection (4), section 31 applies to a transfer or amalgamation of the whole, or any part, of the long term business of any insurer to a portfolio insurance company or of any portfolio insurance company to an insurer or any other portfolio insurance company as if the portfolio insurance company in each case were an insurer. (4) Subsection (3) does not apply to a transfer or amalgamation of the whole, or any part, of the long term business of a relevant segregated portfolio to its portfolio insurance company or of a portfolio insurance company to its relevant segregated portfolio provided that the relevant transferee is not already engaged in insurance business. Premiums and effect of payment of proceeds 28N. Section 30 applies to a portfolio insurance company as if it were an insurer. Insurance, transfer and disposal of shares 28O. (1) No voting shares in a portfolio insurance company shall be issued, transferred or disposed of in any manner, without the prior approval of the Authority. (2) Non-voting shares totalling more than ten per cent of the entire authorised share capital of a portfolio insurance company shall not be issued, and issued nonvoting shares totalling more than ten per cent of the entire issued share capital of a portfolio insurance company shall not be transferred or disposed of in any manner, without the prior approval of the Authority. (3) For the purposes of subsections (1) and (2), the portfolio insurance company shall provide the information to the Authority, within the period of time, the Authority requires for the purposes of assessing whether persons acquiring control or ownership of shares in the portfolio insurance company are fit and proper persons to have control or ownership. (4) In subsections (1) and (2), the reference to shares being transferred or disposed of includes the The Insurance (Amendment) Law, 2013 transfer or disposal of the legal interest in the shares and the transfer or disposal of any beneficial interest in the shares. (5) For the avoidance of doubt and for the purpose of issuing or transferring issued non-voting shares in this section, the reference to shares totalling more than ten per cent includes the cumulative acquisition of non-voting shares of less than ten per cent which amount to more than ten per cent of the entire authorised or issued share capital of a portfolio insurance company. Powers and duties of the Authority in respect of portfolio insurance companies 28P. (1) Section 22(1)(b) applies in respect of a portfolio insurance company as if it were a licensee. (2) The Authority shall in respect of portfolio insurance companies - (a) examine the annual returns submitted to the Authority under section 28E; and (b) examine and make determinations with respect to - (i) business plans submitted to it by exempted companies which propose to register as portfolio insurance companies; (ii) applications for registration under section 28B(1); (iii) proposals for the revocation of the registration of a portfolio insurance company under section 25; (iv) changes under section 28D(c); (v) cases of suspected insolvency; and (vi) the exercise of powers under section 23 or 24. (3) Subject to subsection (4), subsections (2), (3) and (4) of section 22 and sections 23, 24, 25, 26 and 27 shall apply to a portfolio insurance company as if the portfolio insurance company were a licensee except that each reference to \u201clicence\u201d shall be construed as a reference to registration as a portfolio insurance company The Insurance (Amendment) Law, 2013 and section 25(d) does not apply to a portfolio insurance company. (4) In applying section 24(1)(e) to a portfolio insurance company, the reference to section 8(2) shall be construed as a reference to subsections (d),(e),(f),(g) or (h) of section 28D. Deregistration 28Q. A portfolio insurance company may apply to the Authority to deregister as a portfolio insurance company if it - (a) has been granted a licence to carry on insurance business; (b) has ceased to carry on insurance business and its liability has been extinguished to the satisfaction of the Authority; or (c) has ceased to carry on insurance business and is being wound up voluntarily and produces evidence that it is solvent and able forthwith to repay all its creditors, and the Authority may, where an application is made, deregister the portfolio insurance company and upon deregistration it shall not, without being the holder of a licence, be permitted to carry on any insurance business. Registration where relevant segregated portfolio carries on insurance business 28R. (1) Except where subsection (6) applies, where an exempted company (\u201cthe applicant\u201d) applies to be registered as a portfolio insurance company under section 28B and at the time it so applies the relevant segregated portfolio carries on insurance business, the applicant shall also file with the Authority - (a) a declaration made by at least two directors of the controlling relevant insurer setting out an accurate statement - (i) of the assets and liabilities of the relevant segregated portfolio as at a date within three months prior to the date of the declaration; (ii) of any transaction or event which, at the date of the declaration, has occurred or is expected to occur between the date of the statement of assets and liabilities prepared The Insurance (Amendment) Law, 2013 (2012 Revision) pursuant to subparagraph (i) and the date of the transfer and assumption which, if it had occurred before the date of the declaration, would have caused material changes to the assets and liabilities disclosed in the declaration; (iii) that immediately following the transfer and assumption, the relevant segregated portfolio will be solvent; (iv) that the transfer and assumption is bona fide and not intended to defraud creditors of the controlling relevant insurer in respect of the relevant segregated portfolio; (v) no receivership order has been made in respect of the relevant segregated portfolio pursuant to section 224 of the Companies Law (2012 Revision); (vi) that each creditor of the controlling relevant insurer in respect of the relevant segregated portfolio has consented in writing to the transfer and assumption or, alternatively, that adequate notice has been given in accordance with subsection (2) to all creditors of the controlling relevant insurer in respect of the relevant segregated portfolio and that ninetyfive per cent by value of the creditors have consented to the transfer and assumption; and (b) any consents required to the transfer and assumption, whether under the relevant insurer\u2019s memorandum and articles of association or otherwise. (2) For the purposes of subsection (1)(a)(vi), adequate notice is given if notice in writing is sent to each creditor having a claim against the controlling relevant insurer in respect of the relevant segregated portfolio exceeding one thousand dollars. (3) A director who knowingly makes a declaration under subsection (1)(a) without reasonable grounds or who The Insurance (Amendment) Law, 2013 knowingly makes a false declaration commits an offence and is liable on summary conviction to a fine of one hundred  thousand dollars or to imprisonment for five years, or to both. (4) A declaration pursuant to this section may be given in the form of a declaration or affidavit, as the directors may determine. (5) Except where subsection (6) applies, where at the time the applicant is registered as a portfolio insurance company under section 28B(2) the relevant segregated portfolio carries on insurance business - (a) immediately upon the registration or upon a later date, being not later than thirty days after registration, as the applicant specifies when making an application to register as a portfolio insurance company - (i) the rights, the property of every description including choses in action, and the business, undertaking, goodwill, benefits, immunities and privileges of the controlling relevant insurer in respect of the relevant segregated portfolio, shall immediately vest in the applicant; and (ii) the applicant shall be liable for and subject, in the same manner as the controlling relevant insurer in respect of the relevant segregated portfolio, to all mortgages, charges or security interests, and all contracts, obligations, claims, debts, and liabilities of the controlling relevant insurer in respect of the relevant segregated portfolio; (b) an existing claim, cause or proceeding, whether civil (including arbitration) or criminal, pending at the time of the transfer and assumption by or against the controlling relevant insurer in respect of the relevant segregated portfolio, shall not be abated or discontinued by the transfer The Insurance (Amendment) Law, 2013 (1996 Revision) (2012 Revision) and assumption but shall be continued by or against the applicant; and (c) a conviction, judgment, ruling, order or claim, due or to become due, against the controlling relevant insurer in respect of the relevant segregated portfolio, shall not be released or impaired by the transfer and assumption, but shall apply to the applicant. (6) Any controlling relevant insurer may by a resolution of the directors passed prior to the registration as a portfolio insurance company of an exempted company which it controls, disapply the application of subsection (1) and subsection (5) to the applicant. (7) In this section a creditor does not include a policy holder unless the policy holder shall have a claim against the relevant controlling insurer, whether the claim is present or future, certain or contingent, ascertained or sounding only in damages. (8) For the avoidance of doubt - (a) the provisions of the Fraudulent Dispositions Law (1996 Revision), section 146 of the Companies Law (2012 Revision) and section 31 shall not apply to any transfer and assumption; and (b) a portfolio insurance company may but shall not be required to provide any consideration in respect of a transfer and assumption. Offence of supplying false information to the Authority 28S. (1) A portfolio insurance company, applicant for registration as a portfolio insurance company, or any director or officer of a portfolio insurance company or of an applicant shall not knowingly or wilfully supply false or misleading information to the Authority. (2) A portfolio insurance company, applicant for registration as a portfolio insurance company, or any director or officer of a portfolio insurance company or of an applicant who contravenes subsection (1) commits an offence and is liable on summary conviction to a fine of one hundred thousand dollars or to imprisonment for a The Insurance (Amendment) Law, 2013 term of five years, or to both.\u201d. Passed by the Legislative Assembly the 25th day of March, 2013. Mary J. Lawrence Speaker. 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TO PERMIT THE REGISTRATION OF\nPORTFOLIO INSURANCE COMPANIES; AND FOR INCIDENTAL AND\nCONNECTED PURPOSES\n\nENACTED by the Legislature of the Cayman Islands.\n1.\n(1) This Law may be cited as the Insurance (Amendment) Law, 2013.\n(2) This Law shall come into force on such date as may be appointed by\nOrder made by the Governor in Cabinet and different dates may be appointed for\ndifferent provisions of this Law and in relation to different matters.\n2.\nThe Insurance Law, 2010, in this Law referred to as the \u201cprincipal Law\u201d, is\namended in section 2 by inserting in the appropriate alphabetical sequence the\nfollowing definitions -\n\u201c\u201cclass B (iv) insurer\u201d means a holder of a valid class B insurer licence\nreferred to in section 4(3)(b)(iv);\n\u201cgross premium written\u201d means total written premiums prior to any\ndeductions;\n\u201cnet earned premium\u201d means net written premium applicable to the expired\npart of the policy period or reinsurance agreement period;\n\u201cnet written premium\u201d means gross premium written, less reinsurance\npremium ceded; and\n\u201creinsurance premium ceded\u201d means the premium ceded to reinsurers;\u201d.\nShort title and\ncommencement\nAmendment of section 2\nof the Insurance Law,\n2010 - interpretation\n\nThe Insurance (Amendment) Law, 2013\n\n4\n3.\nThe principal Law is amended in section 4 as follows -\n(a)\nin subsection (3)(b)(i), by deleting the words \u201cnet premiums\nwritten\u201d and substituting the words \u201cnet written premiums\u201d;\n(b) in subsection (3)(b), by repealing subparagraphs (ii) and (iii) and\nsubstituting the following subparagraphs -\n\u201c(ii) over fifty per cent of the net written premiums will originate\nfrom the insurer\u2019s related business;\n(iii) fifty per cent or less of the net written premiums  will\noriginate from the insurer\u2019s related business and annual net\nearned premiums are less than sixteen million four hundred\nthousand dollars; or\n(iv) fifty per cent or less of the net written premiums  will\noriginate from the insurer\u2019s related business and annual net\nearned premiums  are equal to or greater than sixteen\nmillion four hundred thousand dollars;\u201d;\n(c)\nin subsection (4), by repealing paragraph (f) and substituting the\nfollowing paragraph -\n\u201c(f) only a person incorporated or reregistered as an exempted\ncompany under the Companies Law (2012 Revision) or\nregistered as a foreign company under Part IX of the\nCompanies Law (2012 Revision) or registered by way of\ncontinuation as an exempted company under Part XII of the\nCompanies Law (2012 Revision) and that has a minimum of\ntwo directors may be licensed as a class B insurer or a class\nC insurer;\u201d and\n(d) in subsection (4)(g), by deleting the words \u201cnet premiums\nwritten\u201d and substituting the words \u201cnet written premiums\u201d.\n4.\nThe principal Law is amended in section 9(4)(b) by inserting after the words\n\u201ca Class B(iii)\u201d the words \u201cand a Class B(iv)\u201d.\n5.\nThe principal Law is amended by inserting after Part 4 the following Part -\n\u201cPART 4A - Portfolio Insurance Companies\n\nAmendment of section 4\n- licences\nAmendment of section 9\n- returns required of\ninsurer\nInsertion of Part 4A -\nportfolio insurance\ncompanies\n\nThe Insurance (Amendment) Law, 2013\n\n5\nInterpretation in\nPart 4A\n\n(2012 Revision)\n\n28A. (1) In this Part -\n\u201ccontrolling relevant insurer\u201d means a relevant insurer that\ncontrols an exempted company;\n\u201cexempted company\u201d means an exempted company under\nthe Companies Law (2012 Revision);\n\u201cnon-voting shares\u201d means shares other than voting shares;\n\u201cportfolio insurance company\u201d means an exempted\ncompany that is not a segregated portfolio company which\nis registered with the Authority as a portfolio insurance\ncompany pursuant to section 28B(2);\n\u201crelevant insurer\u201d means an insurer, other than a class A\ninsurer, established as a segregated portfolio company;\n\u201crelevant segregated portfolio\u201d means the segregated\nportfolio on whose behalf the controlling relevant insurer\ncontrols the relevant exempted company;\n\u201csegregated portfolio company\u201d has the meaning assigned\nunder section 212 of the Companies Law (2012 Revision);\n\u201ctransfer and assumption\u201d means a transfer of assets and\nthe assumption of liabilities made pursuant to  section\n28R(5); and\n\u201cvoting shares\u201d means the shares which carry the right to\nvote at general meetings of a company.\n(2) In this Part, section 2(2)(b) does not apply and\nan exempted company is only controlled by a relevant\ninsurer and a relevant insurer only controls an exempted\ncompany if all of the voting shares issued by the exempted\ncompany are held by the relevant insurer on behalf of one\nof its segregated portfolios.\nRegistration of\nexempted\ncompany as\nportfolio\ninsurance\ncompany\n\n28B. (1)  An exempted company that is controlled by a\nrelevant insurer may make an application in writing to the\nAuthority to register as a portfolio insurance company and\nin order to be registered and remain registered, the\nexempted company shall -\n(a)\nat the time of making the application and\nwithin six months of the end of each\nfinancial year during the continuation of\nthe registration, file with the Authority an\n\nThe Insurance (Amendment) Law, 2013\n\n6\n\n(2010 Revision)\nannual declaration, in the form approved\nby the Authority, declaring -\n(i)\nthe name of the exempted company\nwhich name shall include the letters\n\u201cPIC\u201d or \u201cP.I.C.\u201d or the words\n\u201cPortfolio Insurance Company\u201d;\n(ii) the name of its controlling relevant\ninsurer; and\n(iii) the names of the directors, managers\nand\nofficers\nof\nthe\nexempted\ncompany;\n(b) at the time of making the application\nprovide to the Authority -\n(i)\nthe written consent of the controlling\nrelevant insurer to the registration;\n(ii) a business plan containing the details\nprescribed; and\n(iii) the prescribed application fee; and\n(c)\nwhere section 28R(1) applies, at the time\nof making the application, file with the\nAuthority the documents specified therein.\n(2) If -\n(a)\nan application satisfies the requirements of\nsubsection (1);\n(b) the director, managers and officers of the\nexempted company are the same as the\ndirector, managers and officers of the\ncontrolling\nrelevant\ninsurer\nor\nare\notherwise\npersons\napproved\nby\nthe\nAuthority as fit and proper persons to be\ndirector, managers and officers of a\nportfolio insurance company;\n(c)\nthe Authority approves the business plan\nprovided with the application; and\n(d) the Authority is satisfied that the exempted\ncompany will be able to comply with any\napplicable requirements of the Money\nLaundering Regulations (2010 Revision),\nthe Authority shall approve the application and issue a\ncertificate of registration to the exempted company as a\nportfolio insurance company, subject to conditions\ndetermined by the Authority for the proper operation and\n\nThe Insurance (Amendment) Law, 2013\n\n7\nsupervision of the portfolio insurance company.\nNo requirement\nfor a licence\n28C. With effect from the time it is registered as a\nportfolio insurance company under section 28B(2), a\nportfolio insurance company shall be permitted to carry on\ninsurance business without requiring a licence and section\n3 does not apply.\nContinuing\nobligations\n28D. A portfolio insurance company shall -\n(a)\nat all times be controlled by a relevant\ninsurer;\n(b) include in its name the letters \u201cPIC\u201d or\n\u201cP.I.C.\u201d or the words \u201cPortfolio Insurance\nCompany\u201d;\n(c)\ncarry on insurance business only in\naccordance with the information given in\nits business plan and shall seek the prior\nwritten approval of the Authority for any\nchange to the approved business plan;\n(d) not without the prior written approval of\nthe Authority-\n(i)\nopen outside the Islands a subsidiary,\nbranch, agency or representative\noffice or change its name; or\n(ii) where it is conducting insurance\nbusiness\nother\nthan\nlong\nterm\nbusiness, amalgamate with any one\nor more insurers or other portfolio\ninsurance companies or, other than in\nthe normal course of business,\ntransfer its insurance operations or\nany part thereof, or accept transfer of\nthe insurance operations or any part\nthereof from an insurer or portfolio\ninsurance company;\n(e)\nmaintain\na\nmargin\nof\nsolvency\nin\naccordance with the prescribed solvency\nrequirements;\n(f)\nmaintain adequate arrangements for the\n\nThe Insurance (Amendment) Law, 2013\n\n8\nmanagement\nof\nrisks,\nincluding\nthe\nreinsurance thereof where appropriate;\n(g) maintain capital in accordance with the\nprescribed capital requirements;\n(h) maintain\nan\neffective\nsystem\nof\ngovernance approved by the Authority;\nand\n(i)\nwhere its controlling relevant insurer is a\nclass B (iii) insurer or a class B (iv)\ninsurer,\nmake\nits\naudited\nfinancial\nstatements available to insured persons,\nthird party beneficiaries, and any other\npersons that may be prescribed, on request.\n\nRequired\nreturns of\nportfolio\ninsurance\ncompany\n28E. (1) A portfolio insurance company shall, except as\notherwise provided by the Authority in writing and subject\nto subsection (2), submit to the Authority by way of annual\nreturn, within six months of the end of its financial year -\n(a)\nunless waived by the Authority, audited\nfinancial\nstatements\nprepared\nin\naccordance with internationally recognized\naccounting standards by an independent\nauditor\napproved\nby\nthe\nAuthority,\ntogether with a copy of any prescribed\nmanagement letter issued by the auditor;\n(b) an actuarial valuation of its assets and\nliabilities including loss and loss expense\nprovisions,\ncertified\nby\nan\nactuary\napproved by the Authority;\n(c)\nunless\nwaived\nby\nthe\nAuthority,\ncertification of solvency prepared by a\nperson approved by the Authority in\naccordance\nwith\nthe\nprescribed\nrequirements; and\n(d) any\nother\ninformation\nas\nmay\nbe\nprescribed.\n(2) A portfolio insurance company that -\n(a)\ndoes not conduct long term business; or\n(b) conducts insurance business of the type\ndescribed in section 4(3)(c),\n\nThe Insurance (Amendment) Law, 2013\n\n9\nis not required to make submissions under subsections\n(1)(b) or (c).\n(3) The audited financial statements and actuarial\nvaluation referred to in subsections (1)(a) and (b) shall\ndisclose the standards applied.\nLimitation as to\nnumber of\nportfolio\ninsurance\ncompanies\n28F. A relevant insurer shall not control more than one\nportfolio insurance company on behalf of any relevant\nsegregated portfolio.\nDirectors,\nmanagers and\nofficers\n28G. (1) A portfolio insurance company shall have a\nminimum of two directors.\n(2) The directors, managers and officers of a\nportfolio insurance company may be the same persons as\nthe directors, managers and officers of the portfolio\ninsurance company\u2019s controlling relevant insurer, the same\npersons as the directors, officers and managers of another\nportfolio insurance company which is controlled by the\ncontrolling relevant insurer or may be different persons.\nNon-voting\nshares\n28H. A portfolio insurance company may create nonvoting shares in one or more classes or series and, subject\nto section 28O(2), may issue non-voting shares of any\nclass or series to any person.\nInsurance\nmanager,\nauditor and\nregistered office\n\n28I. (1) A portfolio insurance company shall appoint the\nsame insurance manager as its controlling relevant insurer\nand maintain, at the insurance manager\u2019s place of business\nor at another location approved by the Authority, full and\nproper records of the business activities of the portfolio\ninsurance company sufficient to -\n(a)\nexplain the transactions of the portfolio\ninsurance company;\n(b) disclose, with reasonable accuracy, at any\ntime the state of the affairs of the portfolio\ninsurance company; and\n(c)\nenable the portfolio insurance company to\nprepare annual financial statements.\n(2) Section 20 applies to a portfolio insurance\ncompany as if it were a licensee and the reference to\n\nThe Insurance (Amendment) Law, 2013\n\n10\n\n(2003 Revision)\n\u201clicence\u201d in section 20(1)(e)(iv) shall be construed as a\nreference to registration as a portfolio insurance company\nunder section 28B(2).\n(3) Section 21 applies to a portfolio insurance\ncompany as if it were an insurer and the reference to\n\u201clicence\u201d in section 21(2)(g)(iv) shall be construed as a\nreference to registration as a portfolio insurance company\nunder section 28B(2).\n(4) A portfolio insurance company shall have the\nsame registered office as its controlling relevant insurer\nand shall be deemed to be an \u201cinsurance company\u201d for the\npurposes of section 5(5)(d) of the Companies Management\nLaw (2003 Revision).\n\nNo restrictions\nor limitation on\nentering into\ncontract, etc.\n28J. (1) Subject to any restrictions or limitations\nimposed by the Authority or the memorandum and articles\nof association of a portfolio insurance company, there shall\nbe no restriction or limitation upon a portfolio insurance\ncompany entering into any contract, transaction or\narrangement with any person including -\n(a)\nits controlling relevant insurer acting on\nbehalf of any of its segregated portfolios,\nincluding the relevant segregated portfolio;\n(b) its controlling relevant insurer acting\notherwise than on behalf of any of its\nsegregated portfolios; or\n(c)\nany other portfolio insurance company.\n(2) Nothing contained in subsection (1) permits a\nportfolio insurance company to hold shares in its\ncontrolling relevant insurer.\nPersons which\nare not an\ninsurance group\n28K. A relevant insurer and the portfolio insurance\ncompanies which it controls does not constitute an\ninsurance group for the purposes of this Law.\nFinancial year\nend\n28L. A relevant insurer, each of its segregated portfolios\nand each portfolio insurance company controlled by the\nrelevant insurer shall have the same financial year end.\nLong term\nbusiness\n28M. (1) Section 17 applies to a portfolio insurance\n\nThe Insurance (Amendment) Law, 2013\n\n11\naccounts\ncompany conducting long term business as if it were a\nclass A insurer, a class B insurer or a class D insurer.\n(2) Section 29 applies to a portfolio insurance\ncompany conducting long term business as if it were an\ninsurer.\n(3) Subject to subsection (4), section 31 applies to a\ntransfer or amalgamation of the whole, or any part, of the\nlong term business of any insurer to a portfolio insurance\ncompany or of any portfolio insurance company to an\ninsurer or any other portfolio insurance company as if the\nportfolio insurance company in each case were an insurer.\n(4) Subsection (3) does not apply to a transfer or\namalgamation of the whole, or any part, of the long term\nbusiness of a relevant segregated portfolio to its portfolio\ninsurance company or of a portfolio insurance company to\nits relevant segregated portfolio provided that the relevant\ntransferee is not already engaged in insurance business.\nPremiums and\neffect of\npayment of\nproceeds\n28N. Section 30 applies to a portfolio insurance company\nas if it were an insurer.\nInsurance,\ntransfer and\ndisposal of\nshares\n28O. (1) No voting shares in a portfolio insurance\ncompany shall be issued, transferred or disposed of in any\nmanner, without the prior approval of the Authority.\n(2) Non-voting shares totalling more than ten per\ncent of the entire authorised share capital of a portfolio\ninsurance company shall not be issued, and issued nonvoting shares totalling more than ten per cent of the entire\nissued share capital of a portfolio insurance company shall\nnot be transferred or disposed of in any manner, without\nthe prior approval of the Authority.\n(3) For the purposes of subsections (1) and (2), the\nportfolio insurance company shall provide the information\nto the Authority, within the period of time, the Authority\nrequires for the purposes of assessing whether persons\nacquiring control or ownership of shares in the portfolio\ninsurance company are fit and proper persons to have\ncontrol or ownership.\n(4) In subsections (1) and (2), the reference to\nshares being transferred or disposed of includes the\n\nThe Insurance (Amendment) Law, 2013\n\n12\ntransfer or disposal of the legal interest in the shares and\nthe transfer or disposal of any beneficial interest in the\nshares.\n(5) For the avoidance of doubt and for the purpose\nof issuing or transferring issued non-voting shares in this\nsection, the reference to shares totalling more than ten per\ncent includes the cumulative acquisition of non-voting\nshares of less than ten per cent which amount to more than\nten per cent of the entire authorised or issued share capital\nof a portfolio insurance company.\n\nPowers and\nduties of the\nAuthority in\nrespect of\nportfolio\ninsurance\ncompanies\n28P. (1) Section 22(1)(b) applies in respect of a portfolio\ninsurance company as if it were a licensee.\n(2) The Authority shall in respect of portfolio\ninsurance companies -\n(a)\nexamine the annual returns submitted to\nthe Authority under section 28E; and\n(b) examine and make determinations with\nrespect to -\n(i)\nbusiness plans submitted to it by\nexempted companies which propose\nto register as portfolio insurance\ncompanies;\n(ii) applications for registration under\nsection 28B(1);\n(iii) proposals for the revocation of the\nregistration of a portfolio insurance\ncompany under section 25;\n(iv) changes under section 28D(c);\n(v) cases of suspected insolvency; and\n(vi) the exercise of powers under section\n23 or 24.\n(3) Subject to subsection (4), subsections (2), (3)\nand (4) of section 22 and sections 23, 24, 25, 26 and 27\nshall apply to a portfolio insurance company as if the\nportfolio insurance company were a licensee except that\neach reference to \u201clicence\u201d shall be construed as a\nreference to registration as a portfolio insurance company\n\nThe Insurance (Amendment) Law, 2013\n\n13\nand section 25(d) does not apply to a portfolio insurance\ncompany.\n(4) In applying section 24(1)(e) to a portfolio\ninsurance company, the reference to section 8(2) shall be\nconstrued as a reference to subsections (d),(e),(f),(g) or (h)\nof section 28D.\nDeregistration\n\n28Q. A portfolio insurance company may apply to the\nAuthority to deregister as a portfolio insurance company if\nit -\n(a)\nhas been granted a licence to carry on\ninsurance business;\n(b) has ceased to carry on insurance business\nand its liability has been extinguished to\nthe satisfaction of the Authority; or\n(c)\nhas ceased to carry on insurance business\nand is being wound up voluntarily and\nproduces evidence that it is solvent and\nable forthwith to repay all its creditors,\nand the Authority may, where an application is made,\nderegister the portfolio insurance company and upon\nderegistration it shall not, without being the holder of a\nlicence, be permitted to carry on any insurance business.\nRegistration\nwhere relevant\nsegregated\nportfolio carries\non insurance\nbusiness\n\n28R. (1) Except where subsection (6) applies, where an\nexempted company (\u201cthe applicant\u201d) applies to be\nregistered as a portfolio insurance company under section\n28B and at the time it so applies the relevant segregated\nportfolio carries on insurance business, the applicant shall\nalso file with the Authority -\n(a)\na declaration made by at least two\ndirectors of the controlling relevant insurer\nsetting out an accurate statement -\n(i)\nof the assets and liabilities of the\nrelevant segregated portfolio as at a\ndate within three months prior to the\ndate of the declaration;\n(ii) of any transaction or event which, at\nthe date of the declaration, has\noccurred or is expected to occur\nbetween the date of the statement of\nassets\nand\nliabilities\nprepared\n\nThe Insurance (Amendment) Law, 2013\n\n14\n\n(2012 Revision)\n\npursuant to subparagraph (i) and the\ndate of the transfer and assumption\nwhich, if it had occurred before the\ndate of the declaration, would have\ncaused material changes to the assets\nand\nliabilities\ndisclosed\nin\nthe\ndeclaration;\n(iii) that\nimmediately\nfollowing\nthe\ntransfer and assumption, the relevant\nsegregated portfolio will be solvent;\n(iv) that the transfer and assumption is\nbona fide and not intended to defraud\ncreditors of the controlling relevant\ninsurer in respect of the relevant\nsegregated portfolio;\n(v) no receivership order has been made\nin respect of the relevant segregated\nportfolio pursuant to section 224 of\nthe Companies Law (2012 Revision);\n(vi) that each creditor of the controlling\nrelevant insurer in respect of the\nrelevant segregated portfolio has\nconsented in writing to the transfer\nand assumption or, alternatively, that\nadequate notice has been given in\naccordance with subsection (2) to all\ncreditors of the controlling relevant\ninsurer in respect of the relevant\nsegregated portfolio and that ninetyfive per cent by value of the creditors\nhave consented to the transfer and\nassumption; and\n(b) any consents required to the transfer and\nassumption, whether under the relevant\ninsurer\u2019s memorandum and articles of\nassociation or otherwise.\n(2) For the purposes of subsection (1)(a)(vi),\nadequate notice is given if notice in writing is sent to each\ncreditor having a claim against the controlling relevant\ninsurer in respect of the relevant segregated portfolio\nexceeding one thousand dollars.\n(3) A director who knowingly makes a declaration\nunder subsection (1)(a) without reasonable grounds or who\n\nThe Insurance (Amendment) Law, 2013\n\n15\n\nknowingly makes a false declaration commits an offence\nand is liable on summary conviction to a fine of one\nhundred  thousand dollars or to imprisonment for five\nyears, or to both.\n(4) A declaration pursuant to this section may be\ngiven in the form of a declaration or affidavit, as the\ndirectors may determine.\n(5) Except where subsection (6) applies, where at\nthe time the applicant is registered as a portfolio insurance\ncompany under section 28B(2) the relevant segregated\nportfolio carries on insurance business -\n(a)\nimmediately upon the registration or upon\na later date, being not later than thirty days\nafter registration, as the applicant specifies\nwhen making an application to register as\na portfolio insurance company -\n(i)\nthe rights, the property of every\ndescription\nincluding\nchoses\nin\naction, and the business, undertaking,\ngoodwill, benefits, immunities and\nprivileges of the controlling relevant\ninsurer in respect of the relevant\nsegregated\nportfolio,\nshall\nimmediately vest in the applicant;\nand\n(ii) the applicant shall be liable for and\nsubject, in the same manner as the\ncontrolling relevant insurer in respect\nof the relevant segregated portfolio,\nto all mortgages, charges or security\ninterests,\nand\nall\ncontracts,\nobligations,\nclaims,\ndebts,\nand\nliabilities of the controlling relevant\ninsurer in respect of the relevant\nsegregated portfolio;\n(b) an existing claim, cause or proceeding,\nwhether civil (including arbitration) or\ncriminal, pending at the time of the\ntransfer and assumption by or against the\ncontrolling relevant insurer in respect of\nthe relevant segregated portfolio, shall not\nbe abated or discontinued by the transfer\n\nThe Insurance (Amendment) Law, 2013\n\n16\n\n(1996 Revision)\n\n(2012 Revision)\nand assumption but shall be continued by\nor against the applicant; and\n(c)\na conviction, judgment, ruling, order or\nclaim, due or to become due, against the\ncontrolling relevant insurer in respect of\nthe relevant segregated portfolio, shall not\nbe released or impaired by the transfer and\nassumption, but shall apply to the\napplicant.\n(6) Any controlling relevant insurer may by a\nresolution of the directors passed prior to the registration as\na portfolio insurance company of an exempted company\nwhich it controls, disapply the application of subsection (1)\nand subsection (5) to the applicant.\n(7) In this section a creditor does not include a\npolicy holder unless the policy holder shall have a claim\nagainst the relevant controlling insurer, whether the claim\nis present or future, certain or contingent, ascertained or\nsounding only in damages.\n(8) For the avoidance of doubt -\n(a)\nthe\nprovisions\nof\nthe\nFraudulent\nDispositions Law (1996 Revision), section\n146 of the Companies Law (2012\nRevision) and section 31 shall not apply to\nany transfer and assumption; and\n(b) a portfolio insurance company may but\nshall not be required to provide any\nconsideration in respect of a transfer and\nassumption.\nOffence of\nsupplying false\ninformation to\nthe Authority\n28S. (1) A portfolio insurance company, applicant for\nregistration as a portfolio insurance company, or any\ndirector or officer of a portfolio insurance company or of\nan applicant shall not knowingly or wilfully supply false or\nmisleading information to the Authority.\n(2) A portfolio insurance company, applicant for\nregistration as a portfolio insurance company, or any\ndirector or officer of a portfolio insurance company or of\nan applicant who contravenes subsection (1) commits an\noffence and is liable on summary conviction to a fine of\none hundred thousand dollars or to imprisonment for a\n\nThe Insurance (Amendment) Law, 2013\n\n17\nterm of five years, or to both.\u201d.\n\nPassed by the Legislative Assembly the 25th day of March, 2013.\n\nMary J. Lawrence\n\nSpeaker.\n\nZena Merren-Chin\n\nClerk of the Legislative Assembly.","akn_extracted_at":"2026-06-22 15:41:43.391739+00","cms_id":"2013-0016","law_type":"amending","year":"2013","number":"16","title":"Insurance (Amendment) Law, 2013","status":"in_force"},"provenance":{"files":[{"file_id":"6247","expr_id":"1404","kind":"akn_xml","filename":"2013-0016.akn.xml","source_url":null,"storage_path":"\/Users\/q\/kyleg-data\/working\/AMENDING\/2013\/2013-0016\/2013-0016.akn.xml","content_md5":"b561379c3c450cbcdc0f0e9b8d946580","byte_size":"28314","http_last_modified":null,"fetched_at":"2026-06-22 15:41:43.57761+00"},{"file_id":"2807","expr_id":"1404","kind":"pristine_pdf","filename":"2013-0016.pdf","source_url":"\/cms\/images\/LEGISLATION\/AMENDING\/2013\/2013-0016\/2013-0016.pdf","storage_path":"\/Users\/q\/kyleg-data\/pristine\/AMENDING\/2013\/2013-0016\/2013-0016.pdf","content_md5":"19f2c12feac0cf89a30c31fdad4d799a","byte_size":"149242","http_last_modified":null,"fetched_at":"2026-06-21 23:09:35.642245+00"},{"file_id":"2808","expr_id":"1404","kind":"working_pdf","filename":"2013-0016.pdf","source_url":"\/cms\/images\/LEGISLATION\/AMENDING\/2013\/2013-0016\/2013-0016.pdf","storage_path":"\/Users\/q\/kyleg-data\/working\/AMENDING\/2013\/2013-0016\/2013-0016.pdf","content_md5":"19f2c12feac0cf89a30c31fdad4d799a","byte_size":"149242","http_last_modified":null,"fetched_at":"2026-06-21 23:09:35.642245+00"}],"paragraph_count":37,"latest_history":null},"quality":{"expr_id":"1404","doc_id":"1404","quality_state":"needs_review","quality_score":"80","needs_human_review":"t","deterministic_categories":"{commencement_metadata_problem,duplicate_text,page_header_footer_noise}","llm_categories":"{}","repair_actions":"{collapse_duplicate_text,strip_page_furniture,verify_commencement_metadata}","finding_severity_counts":"{\"low\": 2, \"medium\": 1}","finding_summary":"repeated line furniture detected: the insurance amendment law 2013 x18; insurer x5; companies x4; duplicate-line ratio is 11.33%","assessed_at":"2026-06-22 15:29:46.445831+00","updated_at":"2026-06-22 15:29:46.445831+00"}}