Guidelines on Fit and Proper Criteria for Insurance Undertakings

Transcription

1 Guidelines on Fit and Proper Criteria for Insurance Undertakings CHAPTER 1 - PRELIMINARY Introduction and citation 1. (a) These Guidelines on Fit and Proper Criteria for Insurance Undertakings ( Guidelines ) were made pursuant to the authority granted to the Maldives Monetary Authority by Insurance Industry Regulations. These Guidelines shall be cited as the Guidelines on Fit and Proper Criteria for Insurance Undertakings. Objective 2. These Guidelines set out the fit and proper criteria applicable to all Key Persons in relation to carrying out insurance business by an insurance undertaking. Application 3. These Guidelines apply to all insurance undertakings and all Key Persons of an insurance undertaking. Commencement 4. These Guidelines shall come into force with effect from 1 st October Definitions 5. In these Guidelines, unless otherwise requires:- fit and proper person means a person who is regarded as honest, trustworthy, has integrity and sound financial standing, and whose professional qualifications, background and experience or business interests provides the assurance that the person is competent, capable and willing to fulfil its or his obligations as a relevant Key Person. key person means any person who is a major shareholder, director, chief executive officer, actuary, or any person by whatever name described who participates in policy making functions or is responsible for any material portion of the business activities of the insurance undertaking. major shareholder means a person who, directly or indirectly, holds 10% or more of the capital or the voting rights of a legal entity, or who through other means, in the opinion of the MMA, is able to control the entity of which is deemed to be a major shareholder. MMA means the Maldives Monetary Authority established under Law no: 6/81 (Maldives Monetary Authority Act). Page 1 of 6

2 CHAPTER 2 FIT AND PROPER REQUIREMENT Responsibility 6. Every insurance undertaking shall ensure that its Key Persons are at all times fit and proper in accordance with these Guidelines. It is the responsibility of every person who is or will be a Key Person of an insurance undertaking to ensure that he is a fit and proper person at all times. Requirements 7. (a) Each person who is or will be a Key Person of an insurance undertaking, or a branch or a subsidiary of an insurance undertaking shall be a fit and proper person. (c) (d) (e) (f) The board of directors of every insurance undertaking shall ensure that the fit and proper criteria set out in these Guidelines are satisfied when appointing or electing or continuing the appointment of a Key Person. All insurance undertakings shall provide written notice to the MMA not less than 30 (thirty) days before appointing or electing a Key Person, with the information specified in Appendix A. MMA may require additional information to assess whether a person is fit and proper. Each insurance undertaking shall submit such information and documentation as MMA may request in order to determine whether a Key Person of the insurance undertaking is fit and proper. MMA may object within 30 (thirty) days to any person being appointed or elected or continuing an appointment as a Key Person if such person is not fit and proper as determined by the MMA. All insurance undertakings shall ensure, within 6 (six) months or within such other period determined by the Governor of MMA, from the commencement of these Guidelines, that all Key Persons, those has been appointed or elected before the commencement of these Guidelines meet the fit and proper criteria of these Guidelines. Each insurance undertaking and each person who is required to be fit and proper under these Guidelines shall make available to the MMA such information as is reasonably necessary, in the opinion of the MMA, for the MMA to determine whether the person is fit and proper. Page 2 of 6

3 CHAPTER 3 FIT AND PROPER TEST Factors for fit and proper Fit and proper test 8. The criteria for considering whether a Key Person is fit and proper includes, but not limited to the factors related to: honesty, integrity, reputation, reliability, competence, capability and financial soundness. At a minimum, the standards and criteria set out in Section 9, will apply to assess whether a person is fit and proper. 9. No person shall be regarded as fit and proper if the person: (a) has been refused the right or restricted in its or his right to operate any business or profession for which specific license, registration or other authorization is required in any jurisdiction; (c) (d) (e) (f) (g) has been removed or suspended, by any insurance regulatory authority of any jurisdiction, as a Key Person of any insurance undertaking, unless such removal or suspension is solely the result of his political affiliation and in no way relates to his performance, conduct or competency as relevant Key Person of an insurance undertaking; has been censured, disciplined, suspended or refused membership or registration by a court, any professional body, any government department or agency, any regulatory body in the Maldives or elsewhere, within the last 10 years; has been subject to any proceedings of a disciplinary or criminal nature or has been notified of any investigation which might lead to those proceeding, in the Maldives or elsewhere; has been convicted of any offence or is being subject to any pending proceedings which may lead to such a conviction, in any jurisdiction; has had any judgement, in particular with regard to fraud, misrepresentation or dishonesty, in any civil proceedings or is a party to any pending proceedings which may lead to such a judgment, in any jurisdiction; has accepted civil liability for fraud, misrepresentation or dishonesty under any law in any jurisdiction; (h) has had any enforcement action taken against it or him by MMA ; Page 3 of 6

4 (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) (s) has ever contravened or failed to comply with any provision of Insurance Industry Regulations or any other regulation, rule or order issued by MMA; has been untruthful or provided false or misleading information to MMA or been uncooperative in any dealings with MMA or any other regulatory authority in any jurisdiction; does not have sufficient capacities to reasonably conclude he is of sound mind and able to carry out satisfactorily the duties and responsibilities of his position; does not have educational or professional qualification or satisfactory past performance or expertise, in relation to nature of the Key Person s duties and functions; is an entity, if any of its Key Persons or any of the persons it employs or appoints to act on its behalf to conduct insurance business, does not have satisfactory educational or professional qualification of experience to carry out his duties and functions; is an individual, he is assuming concurrent responsibilities and such responsibilities would give rise to a conflict of interest in discharging his duties as a Key Person; is a Key Person of another insurance undertaking that is not a subsidiary or branch or associate of the insurance undertaking in which the person is or will be a Key Person; has failed, within the last 10 years, to satisfy a judgement of debt, either in whole or in part; has declared bankruptcy and the bankruptcy is undercharged, or has been subject to a bankruptcy proceeding, whether in Maldives or elsewhere; is an entity, it is or has been subject to a winding up proceeding in Maldives or elsewhere; has not satisfied any undisputed obligations for taxes that are due and payable to Maldives Inland Revenue Authority or any other taxation authority in Maldives or elsewhere. Page 4 of 6

5 Additional requirements 10. (a) In addition to criteria set out in Section 9, in case where the Key Person is a chief executive officer of an insurance undertaking, the Key Person shall have any of the following educational qualification and worked in the insurance industry for at least 5 (five) years; or have education in financial matters and worked for at least 8 (eight) years in the insurance industry occupying a managerial position. (i) (ii) Associate member or qualified Fellow of an Insurance Institute that is accepted by MMA; or Undergraduate degree in the area of insurance or risk management. (c) (d) In addition to criteria set out in Section 9, no person shall be regarded as fit and proper where the person is an individual, if he has been or is a Key Person, partner or concerned in the management of a business; which has been or is being, censured, disciplined, convicted of crime offence or wound up or liquidated compulsorily, in any jurisdiction, in relation to the matter took place while the person was a Key Person or concerned in the management of the business. Where the MMA is satisfied as to qualifications, professional experience and conduct of a Key Person specified in subsection of this Section, such Key Person may be exempted from provision of subsection of this Section after the expiration of 5 (five) years following the occurrence of an event specified in subsection of this Section. When assessing whether a person is fit and proper, MMA may, in addition to the fit and proper criteria set out in these Guidelines, consider other factors that are relevant as to see whether the person is honest, competent, integrity, and has sound financial standing, to perform its or his duties as a Key Person. Mitigating circumstances Corrective measures 11. When assessing whether a person is fit and proper, MMA will consider mitigating circumstances in respect of criteria set out in these Guidelines. If a person is determined to be not fit and proper but are compelling reasons why such person otherwise should be allowed to serve as relevant Key Person of an insurance undertaking and if such reasons are acceptable to MMA, MMA may allow such person to be appointed, elected or continue as a Key Person under such conditions and restrictions as MMA may impose. 12. If an insurance undertaking or a Key Person of an insurance undertaking fails to comply with any provision of these Guidelines, MMA may take any one or more Page 5 of 6

6 of the following corrective measures:- (a) (c) (d) (e) (f) send a written warning to the party; issue an order to the party to cease and desist from particular actions, requiring the party to take affirmative action to correct the violations; require the party to cease some of its operations; require that the insurance undertaking remove any of its Key Person; Impose an administrative penalty on the insurance undertaking, and such penalty shall be between 5,000 (five thousand) Rufiyaa and 50,000 (fifty thousand Rufiyaa); impose an administrative penalty on one or more Key Person of the insurance undertaking, in the event that the MMA determines that such Key Person is responsible for the failure to comply, provided such administrative penalty shall be between 5,000 (five thousand) Rufiyaa and 10,000 (ten thousand Rufiyaa). Page 6 of 6

7 Appendix A MALDIVES MONETARY AUTHORITY Boduthakurufaanu Magu, Male Republic of Maldives Telephone: + (960) , Fax: + (960) mail@mma.gov.mv Website: TIFICATION FORM FOR FIT AND PROPER OF KEY PERSONS (LEGAL ENTITIES) I. NAME OF THE INSURANCE UNDERTAKING SUBMITTING THIS TIFICATION (hereafter referred to in the rest of the form as "the insurance undertaking") II. PARTICULARS OF PROPOSED KEY PERSON Name: Registration no.: Date of registration: Place of registration / incorporation: Legal status / form : Legal / Registered address: Contract address: Contact number. (a) Telephone no: Fax no:

8 III. FIT AND PROPER CERTIFICATION If you answer 'no' to any question, additional information can be supplied in a separate sheet. The insurance undertaking certifies that the above mentioned person: has not had any enforcement action taken against it by MMA. 9 has not ever contravened or failed to comply with any provision of Insurance Industry Regulations or any other regulation, rule or order issued by MMA. 10 has not been untruthful or provided false or misleading information to MMA or been uncooperative in any dealings with MMA or any other regulatory authority in any jurisdiction. 11 is not a Key Person of another insurance undertaking that is not a subsidiary or branch or associate of the insurance undertaking in which the person is or will be a Key Person. 12 has not failed, within the last 10 years, to satisfy a judgement of debt, either in whole or in part. 13 has not been declared insolvent, or has not been subject to an insolvency proceeding, whether in Maldives or elsewhere. 14 is not or has not been subject to a winding up proceedings in Maldives or elsewhere. 15 has not satisfied any undisputed obligations for taxes that are due and payable to Maldives Inland Revenue Authority or any other taxation authority in Maldives or elsewhere. 16 has not been refused the right or restricted in its or his right to operate any business or profession for which specific license, registration or other authorization is required in any jurisdiction. has not been removed or suspended, by any insurance regulatory authority of any jurisdiction, as a Key Person of any insurance undertaking, unless such removal or suspension is solely the result of his political affiliation and in no way relates to his performance, conduct or competency as relevant Key Person of an insurance undertaking. has not been censured, disciplined, suspended or refused membership or registration by a court, any professional body, any government department or agency, any regulatory body in the Maldives or elsewhere, within the last 10 years. is not subject to any proceedings of a disciplinary or criminal nature or has not been notified of any investigation which might lead to those proceeding, in the Maldives or elsewhere. has not been convicted of any offence or is being subject to any pending proceedings which may lead to such a conviction, in any jurisdiction. has not had any judgement, in particular with regard to fraud, misrepresentation or dishonesty, in any civil proceedings or is a party to any pending proceedings which may lead to such a judgment, in any jurisdiction. has not accepted civil liability for fraud, misrepresentation or dishonesty under any law in any jurisdiction. has not been or is not a Key Person, partner or concerned in the management of a business; which has been or is being, censured, disciplined, convicted of crime offence or wound up or liquidated compulsorily, in any jurisdiction, in relation to the matter took place while the person was a Key Person or concerned in the management of the business.

9 IV. ADDITIONAL INFORMATION Provide the following information in a separate sheet. 1 Provide ownership and management structure of the person, including (a) details of major shareholders with their names, number of shares and class of shares owned by them, and details of key persons of the above mentioned person. 2 Role, responsibilities and duties of the above person for the position to be held. 3 Provide the manner in which the person will exercise control or otherwise exert influence over the affairs of the insurance undertaking applying submitting this form Provide details of any directorship, employment or other business interests held by the above person in any other insurance undertaking or insurance intermediary or any other financial institution. If the above person is now or ever has been a major shareholder or director or in any other position of any other insurance undertaking or insurance intermediary, provide details thereof including any relationship which now exists or will exist between the other insurance undertaking or intermediary and the insurance undertaking submitting this form. Whether the proposed Key Person intends to hold shares in the insurance undertaking as a trustee or nominee. If so, provide details. The proportion of the voting shares (directly or indirectly) at any general meeting of the insurance undertaking, or of any other organization of which the insurance undertaking is a subsidiary, is or will the proposed Key Person be entitled to vote or exercise control over. Provide details of such voting authority or control. 8 9 Details on other corporate interests, indicating any other corporate, business or trade name used by the above mentioned person. Provide any other information regarding the above mentioned person that may assist MMA in evaluating this IV. DECLARATION Please note that Maldives Monetary Authority may refuse a notification submit by an insurance undertaking under the Guidelines on Fit and Proper Criteria, if MMA does not satisfy that the proposed person is a fit and proper person for the proposed position. The insurance undertaking certify that the person mentioned above meets all the requirements under the Guideline on Fit and Proper Criteria issued by the Maldives Monetary Authority. The insurance undertaking believe that the person mentioned above to be fit and proper to perform the functions, duties and responsibilities in relation to the position mentioned above. The insurance undertaking certify that the information contained in this notification is true and correct to the best of our knowledge. Authorized Signature Designation Company seal FOR OFFICIAL USE ONLY Notification received on: Remarks: