The Lawyer global offshore report – Bermuda

Companies Amendment Act 2004
A new definition of ‘charges’ has been provided in order to better capture all security interests. The term ‘charge’ now includes any interest created in property by way of security, including any mortgage, assignment, pledge, lien or hypothecation.

It is now a requirement that a public company that elects to send summarised financial statements to its members, in lieu of full financial statements, must have its full financial statements available for inspection by the public at the company’s registered office.

When considering whether to revoke
the permit of an overseas company, the Minister of Finance must now have regard to whether the overseas company has paid its annual government fee within 30 days of its due date.

Insurance Amendment Act 2004
Provisions have now been made for the Bermuda Monetary Authority to issue a statement of principles regarding the discharge of its functions and the exercise of its powers under the Insurance Act 1978.

Provisions have also been made to allow the Bermuda Monetary Authority to issue codes of conduct. Such codes are to provide guidance to registered persons, and other persons approved or appointed under the Insurance Act 1978, on the standards to be observed by them in the conduct of their business.

An insurer must now notify the Bermuda Monetary Authority within 14 days (previously 21 days) of any changes to the principal representative or its principal office.

The requirement that the principal representative of an insurer notifies the Bermuda Monetary Authority on the insolvency or impending insolvency of an insurer has now become a formal requirement. Such notification must now be followed by a written report within 14 days (previously 30 days).

An insurer will now not be able to appoint an auditor unless that auditor has first been approved by the Bermuda Monetary Authority. A new standard for independence of auditors has now been introduced and requires the approved auditor to communicate certain matters to the Bermuda Monetary Authority.

Segregated Accounts
Companies Amendment Act 2004
The requirement under Section 24 of the Insurance Act 1978 – that an insurance company writing long-term business must keep its accounts (in respect of such business) separate from any accounts kept in respect of any other business – was felt to be unnecessary for companies operating segregated accounts. Section 24 no longer applies to companies registered as a segregated accounts company under the Segregated Accounts Companies Act 2000.

The ownership status of assets within a segregated account has now been clarified. Now, notwithstanding any rule of law or enactment to the contrary, any asset of a segregated accounts company linked to a particular segregated account is deemed to be owned by the company as a separate fund that does not form part of the general account of the company.

Trustee Amendment Act 2004
The purpose of this amendment act is to enable the power of advancement to be available to the trustees of all trusts governed by the laws of Bermuda, irrespective of when they were consulted or created.

Trust (Special Provisions) Amendment Act 2004
The purpose is to amend Sections 10 and 11 of the Trusts (Special Provisions) Act 1989 to clarify that a trust created validly under the laws of Bermuda can only be set aside under the laws of Bermuda.

Jean-Paul Dyer is an associate at Appleby Spurling & Hunter, Bermuda