Bermuda subsidiary of large re/insurer fined $1.7m for 'serious' breach
The Bermuda Monetary Authority (BMA), the integrated regulator of the financial services sector on the island, has imposed a $1.7 million fine on the Bermuda subsidiary of a leading global re/insurer.
The fine relates to breaches of anti-money laundering and anti-terrorist financing regulations, as well as persistent breaches of the Insurance Act.
The authority has imposed civil penalties totalling $1.7 million on Allianz Life Bermuda, a subsidiary of German insurance group Allianz SE.
Allianz Life Bermuda was incorporated in 1976 and licensed as an insurer since 1981. The Company currently holds a Class 3 licence and Long-Term Class C licence, and was engaged in the insurance and reinsurance of life and long-term risks, which were written outside of Bermuda.
Allianz Life Bermuda has consented to the fines and is planning to cancel its registration with the regulator and commence liquidation proceedings.
The BMA observed breaches and deficiencies of the anti-money laundering and anti-terrorist financing regulations at the life re/insurer following an onsite review.
While there's no evidence of money laundering or terrorist financing, BMA noted, the insurer failed to remediate the findings to the satisfaction of the regulator within a prescribed time period.
The breaches were considered "serious" because of the extent and duration and because they demonstrated a weakness of company controls to ensure full compliance with the regulations. As such, it was fined $1.25 million.
Its breaches of the Insurance Act “demonstrated a pattern of non-compliance” by the company, failing to have a resident director in Bermuda at all times, no regular Bermuda decision-making meetings, nor management to ensure its annual filings were accurate, adequate and timely. It therefore failed to demonstrate that it maintained a head office in Bermuda, as required by the Insurance Act.
The BMA said the Insurance Act breaches highlighted the failure of the company to conduct business in a prudent manner, and it also determined that the corporate administration was not being carried on with the professional skills appropriate to the nature, scale and complexity of its activities. This resulted in a further fine of $450,000.
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