The changes form part of the ‘Roadmap’ for updating the Isle of Man’s regulatory framework for insurance business.
The initial bill proposed changes in a number of key areas, including; the power to introduce regulation to amend primary legislation and capital requirements for insurance firms.
The power to amend primary legislation by regulation would now be subject to approval by the Isle of Man’s parliament, Tynwald, to “introduce a further safeguard”, the amended draft stated.
Under the proposals from the Financial Services Authority, insurers would be required to cover the higher of a minimum capital requirement (MCR) or solvency capital requirement (SCR).
They would be unable to pay a dividend or make a payment to anyone other than a policyholder where the insurance firm is in breach of the SCR or to do so would breach the requirement.
Firms would also be required to inform IOMFSA if a breach occurred or was likely to occur in the next three months.
Changes and reversals
THe IoM FSA has suggested further amendments to the bill, as well as reversing some initial proposals.
Industry feedback suggested that some of the changes needed clarification. Specifically, references to “or at such time or times as may be prescribed” have been removed in the latest draft.
Proposals to set out a more specific requirement for insurance firms to have an appropriate and effective governance framework were removed.
The full consultation document, along with the draft version of the Insurance (Amendment) Bill 2016, can be found here.
The closing date for responses is 11 November 2016.