Title Slide

JUN 8 – 10, 2015

www.bermudacaptive.bm

Corporate Governance

Speaker: Shauna MacKenzie

Corporate Governance

Speakers:

• Shauna MacKenzie, Director, Legal, Policy & Enforcement, Bermuda Monetary Authority

• BMA remains very active internationally:

• International Association of Insurance Supervisors (IAIS);

• International Organisation of Securities Commissions (IOSCO);

• Basel Committee on Banking Supervision; etc.

• These bodies develop governance principles and standards which the BMA reviews and adapts as appropriate for Bermuda.

• In 2015 we embedded in the minimum licensing criteria that insurers shall implement corporate governance policies and processes as the Authority considers appropriate given the nature, size, complexity and risk profile of the insurer.

BMA and Corporate Governance

• Regulatory Acts provide for issuance of Codes of Conduct relating to corporate governance requirements.

• Came into effect July 2010; establishes duties, requirements and standards for all Bermuda Insurers; compliance for all insurers from July 2011.

• Insurance Code of Conduct builds on previous longstanding practice and guidance for governance standards, specifically guidance notes on: Corporate Governance; Risk Management and Internal Controls; these guidance notes on governance standards are now codified such that they are now legally binding.

Insurance Code of Conduct

• Ultimate responsibility for the sound and prudent management of the insurer rests with its Board.

• Delegation of authority to board committees, management, or external parties does not absolve the Board from its responsibilities.

• Board must assess fitness & propriety of its members, controllers and officers and outsourcing functions on a regular basis.

Key Aspects of the Code

• Insurance Manager: Chief/Senior Executive duties may be outsourced to the insurance manager who must possess: strong risk management and internal controls framework; sufficient knowledge of laws and regulations.

• Principal Representative: An approved principal representative acts in an early warning role; monitors compliance of the Insurer. Duties and responsibilities of reporting are pursuant to Section 8A of the Insurance Act.

Key Aspects – cont.

• The Authority will not prescribe the way in which an Insurer complies with the Code; rather, the onus is for the Insurer to demonstrate compliance based on its particular:• NATURE• SCALE • COMPLEXITY

• Different insurers have different risk profiles and are supervised accordingly.

• The principle of proportionality is applicable to all sections of the Code.

Proportionality Principle

Title Slide

JUN 8 – 10, 2015

www.bermudacaptive.bm

Corporate Governance

Speaker: Roger Gillett

Jardine Matheson Group

Lockhart Insurance Company, Ltd.* Core (1977)

JP-02

Jardine Pacific

JMG-03

Jardine Motors Group

FT-04

Zung Fu

DF-05

Dairy Farm

HK-06

Hong Kong Land

MOHG-08

Mandarin

Oriental

* Dates reflect year incorporated within Lockhart

Corporate Governance for Captives

• Make up of the Board– ‘fit and proper persons’– technical competence (collectively) – the value of independent directors– time and commitment– ‘added value’ contributions

• Board Meetings-– Frequency and Format– Value of sub-committees

Corporate Governance for Captives

• Risk Management– Fraud and money laundering control– Conflicts of interest– Internal audit

• Audit and Risk Committee – (Compliance or Governance Ctee)

Corporate Governance for Captives

• Risk Management– Fraud and money laundering control– Conflicts of interest– Internal audit

• Audit and Risk Committee (Compliance or Governance Committee)– Takes detail away from the Board,

allowing it to focus on wider issues– Conforms with Parent’s ERM practice

Corporate Governance for Captives

Good Corporate Governance goes beyond Compliance