1. The Insurance Commission of The Bahamas

2. Agenda Purpose & Mandate Organizational Structure Insurance Industry
Supervisory Strategy
Domestic Insurance Supervisory Plans & Initiatives
External Insurance Sector Developments
External Insurance Supervisory Plans & Initiatives
Domestic & InternationalRelationships

3. Mandate Purpose: Mandate:
Ensure sound and stable insurance marketplace
Ensure consumer confidence
Mandate:
Administration of the Insurance Act and the External Insurance Act
Insurance market surveillance
Promoting and encouraging sound and prudent insurance management and business practices
Advise Minister responsible for insurance matters
Compliance with FTRA and AML legislation.

4. How ICB meets its mandate
Supervision
Market Conduct
Regulation
We contribute to the overall safety and soundness of regulated financial institutions through a program of supervision, regulations and public information
Regulation speaks to the legal framework in which the Commission has the authority to fulfill its overarching mandate. Supervision refers to the policy framework and day-to-day activities in which we as Supervisory Authority engage our registered licensees and monitor their operations
Market Conduct involves market surveillance on industry participants ensuring that they adhere to industry policies. Additionally, they interface with the intermediaries that facilitate buying and selling of policies between insurers and policyholders.

5. Board of Commissioners
ICB Organization
Board of Commissioners
Superintendent
Insurance Supervision
Life Insurance
General Insurance
External Insurance
Legal Unit
Office of the Superintendent of Insurance
Experts and Consultants
Intermediary & Market Conduct Unit
The Board of Commissioners meets on a monthly basis

6. The Bahamas Insurance Industry
Type of Licence
2016
2015
2014
2013
2012
Domestic Insurers
Property & Casualty/General 17 16 13
Long-Term/Life & Health 11 12
Association of Underwriters 1
Total Domestic Insurers 29 28 25
Domestic Intermediaries
Agents & Brokers 57 56 53 55
Sub-agents 21 26 36
Salespersons
691
686
785
843
1730
Total Intermediaries
774
763
868
924
1821
External Insurers
Captive Insurers
Single Insurance Companies 9 14 8
Segregated Account Companies (SACs) 7 6 4 3
Captive Cells (Segregated Accounts)
157
126 99 65 39
Other External Insurers (non-captives) 5
Total Captive Insurers
173
149
117 82 54
External Intermediaries
Insurance Managers 10
Brokers 2

7. Bahamas Insurance Industry
Life & Health
(2016)
Property & Casualty
External
(2015)
Gross Premiums
$444m
$310m
$98m
Net Premiums
$395m
$100m
$60m
Net Income
$43m
($7.5m)
$52m
Assets
$1.3b
$939m
$1.07b
Investment Assets
$1.15b
$230m
$849m

8. Supervisory Strategy Compliance with IAIS Insurance Core Principles
Promoting international best practices
Developing staff/ building capacity
Proportionality principle
Leveraging of governance and risk management practices
An integrated approach
Adapting not re-inventing
Risk Based Supervisory Methodology

9. Overview of Risk Based Supervision
Identification of potential risks
Assessment of mitigating factors
Channels supervisory resources to high risk areas
Early Intervention/ Proactive/Forward Looking
Self explanatory

10. Risk-based Supervision
Principles of Risk Based Supervision
Principles
vs.
Rules Based
Proportionality
Risk Management
Corporate Governance
Continuous Supervision
Early Intervention
Risk-based Supervision
Principal vs. Rules – RBS involves the use of supervisory judgment and focus of principles rather rules is required. However, this is not an “either or” proposition and we have to find the right balance that is appropriate for our industry and environment.
Proportionality - This is a recognition that one size does not fit all. The level and sophistication of corporate governance, risk management, and internal control practices required at a regulated entity is a function of the nature, size and complexity of the institution. This is also a consideration in the supervisory effort that we devote to an institution. Well-managed institutions can expect less supervision and regulation relative to higher risk institutions.
Risk Management – Focuses on assessing the risk management at our institutions. It leverages off the the risk management practices at our institution , so institution with better RM less focus. This approach promotes good risk management at institution and we should see this evolve overtime as we continue to implement RBS.
Corporate Governance - Senior management and Boards of Directors of firms are responsible for the management and oversight of their insurance companies. Our job as regulators is to assess the quality and effectiveness of that oversight. Where we see room for improvement in corporate governance and oversight we will recommend changes, in keeping with the principle of proportionality. This helps to promote better corporate governance in our institutions.
Continuous Supervision – off site monitoring and on site examination and reviews. Level of monitoring dependent on the risk profile of the institution. Tied to
Early Intervention – Speaks to one of the powers of the Commission to exercise its authority on a licensed entity that may be in jeopardy of continuing as a going concern entity. Early intervention forms part of the Supervisory Ladder of Intervention, the framework for remedial supervisory intervention. It supports early identification of risks to a firm’s viability and ensure that firms take appropriate remedial action to reduce the probability of failure. Secondly, it will flag actions that ICB will need to address in advance to prepare for the resolution of a firm.

11. Supervisory Plans & Initiatives
Implementation of Risk-based Capital
100 % completed for Life Insurers
Consultation Period to begin for General Insurers in 2017
Consumer Awareness & Education
Use of online reporting system (ORIMS)
Continue to monitor progress of National Health Insurance
AML for General Insurers
CEO Forum
Continue to establish MOUs

12. External Insurance Sector Developments
Segregated Account Companies used as a more cost efficient means of forming captives
Increased interest in long-term insurance as wealth management vehicles (i.e. variable life insurance business & unit-linked insurance)
Growth stemming largely from USA (legacy business throughout Europe, Asia and South America)
Segregated Account Companies act as a core facilitator to the creation of the segregated accounts or cells. Each cell is capitalized according to their assumption of risk and actuarially projected % of claims. Some of the benefits or advantages

13. Supervisory Plans & Initiatives for External Insurance
Schedule onsite prudential visits within 6 months to 1 year post-licensing
Fully implement Risk-based Supervision
Introduction of quarterly reporting
More frequent communication with other relevant international regulators
Implementation of Risk-based Capital

14. Domestic Relationships
Insurance Advisory Committee
Group of Financial Services Regulators (GFSR)
Bahamas Financial Services Board (BFSB)
Bahamas Insurance Association (BIA)
Bahamas Insurance Brokers Association (BIBA)
Developing a consultative relationship with are stakeholders is a commitment of the Insurance Commission. The above list outlines some of these relationships.
OIC staff has attended meetings with various industry groups and made industry presentations on regulatory and supervisory requirements.

15. International Relationships
International Association of Insurance Supervisors (IAIS)
Group of International Insurance Centre Supervisors (GIICS)
Caribbean Association of Insurance Regulators (CAIR)
Caribbean Regional Technical Assistance Centre (CARTAC)
International Regulatory Agencies
Participation in International forums is key not only to our development and learning but provides us an opportunity to showcase our industry and our institutions.
As some of you will know, in November 2011 we hosted a very successful annual training conference for the Offshore Group of Insurance Supervisors that was attended by regulators from 15 jurisdictions.
Also in 2011, the Office of the Insurance Commission was invited to present at the Caribbean Association of Insurance Supervisors annual conference in Cayman.
We have ongoing contact with international regulatory agencies. This has the advantage of particularly when dealing with cross-border applications and verifying credentials of applicants.
During 2011, we have continued to work with the Toronto Centre for Leadership in developing and training our staff. They have also assisted with the development of our risk based supervisory practices.

16. Questions or Comments THANK YOU!! Carl R. Culmer Jr. – Senior Analyst
General & External Insurance Supervision
Contacts:
Telephone: (242)
THANK YOU!!