Bermuda: Budget News For Bermuda Insurers

Last Updated: 21 May 1997
Bermuda's Minister of Finance presented his 1997 Budget on 19th February, 1997, at which time he stated:

"Consideration has been given to the fee structure currently applicable to insurance companies. As a result, legislation will provide for reductions in annual fees for captive insurance companies, but there will be an increase in the fee charged to Class 3 and Class 4 companies and to non-resident insurance companies. At the same time the fee structure generally for insurance companies will be clarified and rationalised to make clear the fees paid by companies which carry on composite business."

The Government intention to revise the annual fee structure for insurance companies has now been the subject of specific implementing legislation in the form of The Government Fees Amendment Regulations 1997 (the "1997 Fees Amendment").

The 1997 Fees Amendment amends The Government Fees Regulations 1976, with all fee changes effective 1st April, 1997.

The 1997 Fees Amendment introduces new registration fees and annual business fees according to the class of insurer, whereas previously the level of fees depended only on whether the company was classified as either "non-resident", "exempted", "permit" (i.e. overseas) or "other".

It is welcome news that no proposal has been made in the 1997 Budget to increase the annual government fees for insurers. As for other Bermuda companies, the level of such fees depends on an insurer's assessable capital, the categories of which are set out in the Fifth Schedule to The Companies Act 1981.

In establishing separate fees for each class of insurer, the 1997 Fees Amendment reflects, for the first time since the passage of The Insurance Amendment Act 1995 (which amended The Insurance Act 1978, "The Insurance Act"), that there are different administrative burdens associated with the regulation of each class of insurer.

Here is the summary of the changes:

REGISTRATION FEES 
(The Initial Fees Payable For An Insurance Licence)

                                  OLD FEES $            NEW FEES $
                               (Effective Up To       (Effective On
                                31st March,1997)       1st April,1997)
AS AN INSURER:

non-resident insurance             2,895                     3,000
undertaking;
exempted companies                 2,315                  by class
permit (overseas) companies        2,315                  by class
other                              1,740                  by class
Class 1 - general business only    2,315                     1,500
Class 1 - general & long-term      2,315                     2,500
Class 2 - general & long-term      2,315                     1,500
Class 2 - general & long-term      2,315                     2,500
Class 3 - all types of business    2,315                     2,500
Class 4 - all types of business    2,315                    15,000

LONG-TERM BUSINESS ONLY:

exempted companies                2,315                      2,500
permit (overseas) companies       2,315                      2,500


ANNUAL BUSINESS FEES
(The Yearly Fees Payable By Insurers)

AS AN INSURER:

non-resident insurance            2,895                      3,000
undertaking
exempted companies                1,155                   by class
permit (overseas) companies       2,315                   by class
other                             1,740                   by class
Class 1 - general business only   -                            800
Class 1 - general & long-term     -                          2,500
Class 2 - general business only   -                            800
Class 2 - general & long-term     -                          2,500
Class 3 - all types of business   -                          2,500
Class 4 - all types of business   -                         15,000

LONG-TERM BUSINESS ONLY:

exempted companies                2,315                      2,500
permit (overseas) companies       2,315                      2,500
As a Manager/Broker/Agent         1,155                      1,155
As an insurance Salesman            155                        155

In addition to the changes noted above, the 1997 Fees Amendment now imposes a fee of $100 where an existing insurer applies under section 4(6) of the Insurance Act to change its registration to a different class of general business or to register as a long-term insurer.

The insurance team of Appleby, Spurling & Kempe has been actively contributing to the growth of Bermuda's dynamic international insurance industry by our involvement in formulating and recommending changes to relevant legislation and advising on innovative corporate structures. Our Insurance Team is the largest practice area within the firm and comprises ten corporate attorneys practising almost exclusively in the insurance fields and twelve full-time dedicated corporate administrators. Should you wish to find out more about CATEX Bermuda, please contact Warren Cabral, Head of the Insurance Team, using the telephone or facsimile number or e-mail address printed on the first page.

The Insurance Team Attorneys of Appleby, Spurling & Kempe are:

Warren Cabral (Head)
F.  Chesley White (Deputy)
John D. Campbell Q.C. (Senior Partner)
Richard D. Spurling
Kenneth E.T. Robinson
Douglas H. Molyneux
Michael J. Burns
Timothy C. Faries
Gigi Barit
Brian J. Patterson
The insurance Team Corporate Administrators of Appleby, Spurling & Kempe and their secretaries are:

Insurance Team I

Cheryl S. Harney (Corporate Group Manager)
Peggy A. Tucker (Deputy)
Nicola J. Backeberg
Michelle F. Smith
Jill D. Paynter
Kevamae Sampson - Team Secretary
Tonita S. Eversley - Team Secretary
Marcia Gillbert - Team Secretary

Insurance Team II

Audrey M. Mansell (Corporate Group Manager)
Judy Taylor (Deputy)
Cilma A. Lamb
Shari L. Simons
Stacy Grant
Dionne G. Hackett - Team Secretary
Marcia Gilbert - Team Secretary
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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