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4 July 2018Insurance

BMA revokes licence of broker Intrepidus after ‘serious’ breaches

Intrepidus Insurance Services, a Bermuda insurance broker, has had its registration to operate revoked by the Bermuda Monetary Authority (BMA) following an investigation triggered by a complaint against the company.

The move represents a relatively rare example of the Authority using its powers to sanction companies and publically detail the reason for its actions – a change of policy in this sphere first announced in 2016.

Intrepidus provides insurance brokering, risk management, loss adjusting and independent insurance advising services to business owners and residents in Bermuda. It is owned and operated by local Bermudian insurance professionals who claim more than 50 years of combined insurance and reinsurance experience.

Its chief executive is Henry Sutton, who has previously worked for several high-profile international re/insurance groups including LaSalle Re, ACE Bermuda and AIG Cat Excess Liability Insurance.

The BMA has cancelled the insurance brokerage registration of Intrepidus pursuant to the provisions of various sections of the Insurance Act 1978. The Authority said is satisfied that the Company: provided false, misleading or inaccurate information for the purposes of the Act; has not complied with a requirement made of it under this Act; and has not fulfilled the Minimum Criteria.

In a statement, the BMA said: “The Authority is taking this action to safeguard the interests of former, current and potential clients of the company. It viewed the above breaches as serious because of their nature and extent, and because they demonstrated systemic weaknesses of the Company’s internal controls in all regards.

“The breaches outlined above came to light after the Authority received a complaint about the Company’s business practices and conduct. Based upon the findings of its investigation, the Authority no longer had confidence in the Company’s ability to manage its affairs to the benefit of its clients or satisfy the Minimum Criteria as detailed in Schedule 1 of the Act.

“The cancellation of the Company’s registration highlights the importance of the Authority’s role in protecting the reputation of the jurisdiction and protecting the interests of clients of the Authority’s regulated entities. Once the enforcement action was initiated, the statutory process was followed, culminating in a ten-day appeal period that expired on 2 July 2018.”

The BMA announced in March 2016, in the Authority’s 2016 Business Plan, a change of policy in relation to enforcement decisions. CEO Jeremy Cox said: “Until now, the Authority has chosen to limit publicly disclosed details of enforcement actions to a fairly brief notification in its annual report. But from 2016 onwards, the Authority will publish details of any use of its enforcement powers.

“Such publicity will be in the form of a press release issued by the Authority following conclusion of any appeal or after expiry of an appeal period. The release will detail the nature of the enforcement action, the size of any penalty, the identity of the entity or person involved and the circumstances of the breach. Details will also be included in the annual report and on the Authority’s website.”

Cox added at the time that this increased transparency was critical to the reputation of the jurisdiction “and is intended to demonstrate to those who rely on our supervisory adjudications that their trust is not misplaced and that Bermuda-based entities found to be deficient in meeting their obligations run the risk of being required to account publicly for their actions”.

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