Repeal and savings

(1) The Insurance Act, Chapter 251 of the Laws of Belize Revised Edition 2000, is hereby repealed. (2) Notwithstanding the repeal of the said Act, all rules, Regulations and orders made thereunder shall continue in force insofar as they are not inconsistent with the provisions of this Act, and until repealed and replaced by rules, regulations and orders made under this Act. 180 SCHEDULE I INSURANCE ACT Classes of Insurance Business [section 3(1)] The classes of insurance business to which this Act applies are, (a) liability insurance including employers’ liability and public liability but excluding liability relating to ships, aircraft and motor vehicles; (b) marine, aviation and transit insurance including transit and liability risks relating thereto; (c) motor vehicle insurance inclusive of risks relating to property damage and liability incurred in connection with the use of motor vehicles; (d) long-term insurance business which shall include ordinary life and industrial insurance business, permanent personal accident and health insurance and group life insurance business; (e) pecuniary loss and financial interest insurance including credit, loss of profits or business interruption or consequential loss and fidelity guarantee and credit insurance; (f) health insurance business which includes, group health insurance business personal Insurance 181 accident and sickness insurance, critical illness insurance business; (g) property insurance including loss of, or damage to glass, or property by fire, theft and natural forces; (h) private pension and annuity plans and schemes; (i) all other classes of insurance not listed above but as are specified on the licence issued by the Supervisor. 182 Insurance SCHEDULE II INSURANCE ACT Deposits under Sections 24 and 79. [sections 24 and 79] 1.-(1) All deposits made by or on behalf of a licensed insurer pursuant to section 24 or 79 shall be deemed to form part of the assets of the insurer. (2) All interests and dividends accruing due on any securities deposited pursuant to section 24 or 79 shall be paid to the licensed insurer. 2. The Supervisor shall, on demand by a licensed insurer, furnish to the insurer a certificate in writing setting out the nature and extent of any deposit held by the Supervisor under section 24 or 79 in respect of that insurer together with the particulars of the securities (if any) forming the whole or part of the deposit. 3.-(1) If the Supervisor is satisfied that by reason of depreciation in the value of securities or other cause the value of money and prescribed securities deposited by or on behalf of a licensed insurer with him falls short of the value required by Part Il or Part III he shall, by notice in writing, require the licensed insurer to deposit with him money or prescribed securities or both to a value deemed by him to be sufficient to bring the amount of the deposit to the value required by Part II or Part III, as the case may be. (2) A notice under this paragraph shall not be issued until the Supervisor has given an opportunity to the licensed insurer to be heard in connection with the matter. Insurance 183 (3) Any licensed insurer who fails to deposit with the Supervisor money or prescribed securities or both as required by him under this paragraph commits an offence and the Supervisor may, if he considers it necessary in the interest of the policyholders, cancel the licence of the insurer. 4. If any moneys or securities held by the Supervisor as, or as part of, the deposit required to be made by the licensed insurer under section 24 or 79, are lost, stolen, destroyed or damaged while so deposited, the injury occasioned to all persons interested in the moneys or securities shall be made good out of moneys to be provided for the purpose by the National Assembly. 5.-(1) A licensed insurer may at any time substitute for any security or cash held by the Supervisor as, or as part of, the deposit required to be made under section 24 or 79, any prescribed security, but so that the total amount then deposited is not less than the amount required by Part II or Part III and any security so substituted shall be subject to the same charge or liability as the security or cash withdrawn. (2) (a) when a licensed insurer has ceased to transact business and has given written notice to that effect to the Supervisor or when the licence of an insurer has been cancelled the securities and cash of the insurer in the hands of the Supervisor shall not be delivered to the insurer until all his outstanding risks are insured or until surrenders thereof are obtained to the satisfaction of the Supervisor. (b) upon making application for its securities or cash, a licensed insurer shall file with the Supervisor, in respect of all policies issued locally, a list of all policyholders who have not been so reinsured, or who have not surrendered their policies; and the licensed insurer shall at the same time publish, and continue the publication at least once a week for twelve consecutive weeks, in the Gazette 184 Insurance and in at least one newspaper published in Belize, a notice that he will apply to the Supervisor for the release of his securities and cash on a certain day not less than three months after the date on which the notice is first published in the Gazette and calling upon the policyholders opposing such release to file notice of their opposition with the Supervisor on or before the day so named. (c) after the day so named in the said notice, if the Supervisor is satisfied that the deposit of the licensed insurer with him is substantially in excess of the requirements of Part II or Part III as the case may be, in respect of the continuing policyholders, he may with the concurrence of the Minister from time to time release to the insurer such portion of the excess as he thinks proper in the circumstances, and shall continue to hold the remainder of the deposit for the protection of the continuing policyholders as provided for in Parts II and III. (d) thereafter from time to time as such policies lapse, or proof is adduced that they have been satisfied, further amounts may be released on the authority aforesaid. CAP. 250. (e) notwithstanding this paragraph, where the licensed insurer is a body corporate, then, if it is in liquidation, the securities of such insurer may, on the Order of any Court having jurisdiction under this Act or the Companies Act, be released by the Supervisor to the liquidator. (3) Where the licensing of a licensed insurer who has not commenced to carry on insurance business in Belize is cancelled Insurance 185 pursuant to Part II or Part III, the Supervisor shall refund to such insurer any moneys, and deliver to him any securities, deposited by him pursuant to section 24 or 79. 186 Insurance SCHEDULE III1 INSURANCE ACT Investment of Statutory Funds [section 35] 1. A company may invest its statutory funds in assets of the following classes– (a) the bonds, debentures, stocks, or other evidences of indebtedness of or guaranteed by the Government of– (i) any Commonwealth country or dependency or the Republic of Ireland; or (ii) the United States of America or a state thereof; or (iii) any country approved by the Minister in which the company carries on insurance business; and (iv) the country in which the head office of the company is situated or a province or state thereof; (b) the bonds or debentures of a corporation that are secured by the assignment to a trust corporation in Belize or the country in which the head office of the company is situated or a province or state thereof of an annual payment that the Government of Belize or of the 1This Schedule was amended by Statutory Instrument 117 of 2008. Insurance 187 country in which the head office of the company is situated or a province or state thereof has agreed to make, where such annual payment is sufficient to meet the interest falling due on the bonds or debentures outstanding and the principal amount of the bonds or debentures maturing for payment in the year in which the annual payment is made; (c) the bonds or debentures issued by a charitable, educational or philanthropic corporation where annual subsidies, sufficient to meet the interest as it falls due on the bonds or debentures and to meet the principal amount of the bonds or debentures on maturity, are, by virtue of a general or private Act of Belize of the country in which the head office of the company is situated or a province or state thereof payable by or under the authority of such country, state or province to a trust corporation as trustee for the holders of the bonds or debentures; (d) the bonds, debentures or other evidences of indebtedness of a corporation incorporated in Belize or the country in which the head office of the company is situated or a province or state thereof that are fully secured by statutory charge upon real estate or upon the plant or equipment of the corporation used in the transaction of its business, if interest in full has been paid regularly for a period of at least ten years immediately preceding the vesting thereof in trust upon the securities of that class of the corporation then outstanding; (e) the bonds, debentures or other evidences of indebtedness issued by an authority or other body without share capital established and 188 Insurance empowered pursuant to a statute of Belize or the country in which the head office of the company is situated or a province or state thereof to administer, regulate the administration of, provide or operate port, harbour, airport, bridge, highway, tunnel, transportation, communication, sanitation, water, electricity or gas services or facilities and for any of these purposes to levy, impose or make taxes, rates, fees or other charges that may be used only in carrying out the objects of this authority or other body and are sufficient to meet its operating, maintenance and debt service charges; (f) the bonds, debentures and other securities of or guaranteed by the International Bank for Reconstruction and Development established by the Agreement for an International Bank for Reconstruction and Development; (g) the bonds, debentures or other evidences of indebtedness– (i) of a corporation incorporated in any country listed in sub-paragraph (a) that has paid(A) a dividend in each of the five years immediately preceding the vesting thereof in trust at least equal to the specified annual rate upon all of its preferred shares; or (B) a dividend in each year of a period of five years ended less than one year before the date of vesting thereof in trust upon its Insurance 189 common shares of at least four per cent of the average value at which the shares were carried in the capital stock account of the corporation during the year in which the dividend was paid; or (ii) of or guaranteed by a corporation incorporated in any country listed in sub-paragraph (a), where the earnings of the corporation, in a period of five years ended less than one year before the date of the vesting thereof in trust, have been equal in sum total to at least ten times and in each of any four of the five years have been equal to at least one and one- half times the annual interest requirements at the date of vesting in trust on all indebtedness of or guaranteed by it other than indebtedness classified as a current liability in the balance sheet of the corporation; and if the corporation owns directly or indirectly more than fifty per cent of the common shares of another corporation, the earnings of the corporation during the said period of five years may be consolidated with due allowance for minority interests, if any, and in that event the interest requirements of the corporation shall be consolidated and such consolidated earnings and consolidated interest requirements shall be taken as the earnings and interest requirements of the corporation; and for the purpose of this subparagraph “earnings” shall mean earnings available to meet interest charges on 190 Insurance indebtedness classified as a current liability; (h) guaranteed investment certificates issued by a trust company incorporated in any country listed in sub-paragraph (a) that, at the date of vesting thereof in trust, complied with the requirements described in sub-paragraph (g)(i) in respect of the payment of dividends; (i) the preferred shares of a corporation in any country listed in sub-paragraph (a) that has paid(A) a dividend in each of the five years immediately preceding the date of vesting of such preferred shares in trust at least equal to the specified annual rate upon all of its preferred shares; or (B) a dividend in each year of a period of five years ended less than one year before the date of the said vesting upon its common shares of at least four per cent of the average value at which the shares were carried in the capital stock account of the corporation during the year in which the dividend was paid; (j) the fully paid common shares of a company incorporated in any country listed in sub- paragraph (a) that during a period of five years that ended less than one year before the date of purchase of the common shares has eitherInsurance 191 (A) paid a dividend in each such year upon its common shares; or (B) had earnings in each such year available for the payment of a dividend upon its common shares, of at least four per cent of the average value at which the shares were carried in the capital stock account of the corporation during the year in which the dividend was paid or in which the corporation had earnings available for the payment of dividends, as the case may be, but a company shall not purchase more than thirty per cent of the common shares of any corporation; and a company shall not purchase its own shares and a company licensed to transact the business of life insurance shall not, in respect of its life insurance business, purchase the shares of a company transacting the business of life insurance. 2. Mortgages and other titles for repayment of loans secured by– (a) any of the bonds, debentures or other evidences of indebtedness, shares or other securities which the company may invest in under paragraph 1, but the amount at which the mortgage or other title so secured shall not exceed the amount at which the bonds, debentures, or other evidences of indebtedness, shares or other securities might be vested in under paragraph 1; 192 Insurance (b) real estate or leaseholds for a term of years or other estate or interest in real estate in Belize or the country in which the head office of the company is situated, where the amount of the loan together with the amount of indebtedness under any mortgage or other charge on the real estate or interest therein ranking equally with or superior to the loan does not exceed three quarters of the value of the real estate or interest therein, subject to the exception that a company that has real estate invested in its funds, may upon sale thereof, invest a mortgage or other title accepted as part payment and secured thereon for more than three quarters of the sale price of the real estate; (c) real estate or leaseholds in Belize or in the country in which the head office of the company is situated or in a province or state thereof, notwithstanding that the loan exceeds the amount that the company may otherwise invest in, if the excess is guaranteed or insured by the Government of Belize or through an agency of the Government of Belize or the Government of the country in which the head office of the company is situated or of a province or state thereof; (d) ground rents, mortgages or hypothecs on real estate or leaseholds in Belize or in the country in which the head office of the company is situated, where the amount of the mortgage or hypothec together with the amount of indebtedness under any mortgage or hypothec on the real estate or leasehold ranking equally with or superior to the mortgage or hypothec that is invested in does not exceed three Insurance 193 quarters of the value of the real estate or leasehold covered thereby. 3. Real estate or leaseholds– (a) real estate or leaseholds for the production of income in Belize or in the country in which the head office is situated, either alone or jointly with any other company transacting the business of insurance in Belize or in the country in which the head office of the company is situated or with any loan company or trust company incorporated in Belize or in the country in which the head office of the company is situated if– (i) a lease of the real estate or leasehold is made to, or guaranteed by the Government of Belize or in the country in which the head office of the company is situated or an agency of any such government or a municipality in Belize or in the country in which the head office of the company is situated or any agency thereof; (ii) the lease provides for a net revenue sufficient to yield a reasonable interest return during the period of the lease and to repay at least eighty five per cent of the amount invested in the real estate or leasehold within the period of the lease but not exceeding thirty years from the date of investment, but a parcel of real estate or a leasehold may not be included in the assets if the total investment by the company therein exceeds two per cent of the accepted value of the total assets in Belize or 194 Insurance in the country in which the head office of the company is situated. (b) real estate or leaseholds for the production of income in Belize or in the country in which the head office of the company is situated, either alone or jointly with any other company transacting the business of insurance in Belize or in the country in which the head office of the company is situated, or with any loan company or trust company incorporated in Belize or in the country in which the head office of the company is situated, if the real estate or leasehold has produced in each of the three years immediately preceding the date of investing thereof net revenue in an amount that, if received in each year following the date of investment, would be sufficient to yield a reasonable interest return on the amount invested in the real estate or leasehold and to repay at least eighty-five per cent of that amount within the portion of the economic lifetime of the improvements to the real estate or leasehold that remained at the date of investment but not exceeding forty years from that date; but a parcel of real estate or a leasehold may not be included in the assets if the total investment by the company therein exceeds two per cent of the accepted value of the total assets in Belize or in the country in which the head office of the company is situated; (c) real estate in Belize or in the country in which the head office of a company is situated required by the company for its actual use or occupation or reasonably required by it for the natural expansion of its business or acquired by foreclosure of a mortgage on real estate Insurance 195 where the mortgage is an investment under this Act; 4. (a) cash balances in Belize or in the country in which the head office of the company is situated, funds in the hands of the trustee or in a trust account maintained by the trustee in a licensed and regulated bank, building society or credit union in Belize or in the country in which the head office of the company is situated; (b) the total accepted value of the assets of any company invested in common shares shall not at any time exceed twenty-five percent of the accepted value of the total assets in the country of the company; (c) the total accepted value of the real estate or leaseholds for the production of income invested under this Schedule, shall not at any time exceed ten percent of the accepted value of the total assets in the country of the company; (d) a company shall not invest in trust bonds, debentures or other evidences of indebtedness on which payment of principal or interest is in default. 5. Units held in the Belize Money Market Fund [established by the Unit Trust Corporation (Belize) Ltd], subject to the following conditions, (a) the unit account shall be marked “COLATERAL for Statutory Fund or Statutory Deposit”; 196 Insurance (b) the Unit Certificate must be accompanied by a letter in the form of Schedule IV to the Insurance Act; Schedule IV. (c) the money market fund shall constitute no more than 2% of the total admissible assets of the company. Insurance 197 SCHEDULE IV INSURANCE ACT Letter of Undertaking from Licenced Financial Institution to Hold Insurer’s Statutory Deposit to the Order of Supervisor of Insurance [sections 24 and 79] (To be submitted on the official letterhead of the Bank, Building Society or Credit Union, as the case may be) To: The Supervisor of Insurance Office of the Supervisor of Insurance Belmopan Dear Sir/Madam, WHEREAS, the (Name of Insurer ________________) has deposited with the (Name of licensed and regulated Bank, Building Society or Credit Union) the sum of $___________________________________ (_______________________________-(in words) in a term deposit no.__________________ dated _________________; NOW in consideration of your agreeing to accept the said term deposit as approved security for the purpose of sections 24 and 79 of the Insurance Act, Cap. 251 we, the undersigned (Bank, Building Society or Credit Union) hereby undertake to hold the said term deposit solely to your order and to pay you on your first simple demand notwithstanding any contestation from the above-mentioned insurer any sum which you may so demand from time to time subject to the total amount payable under this undertaking being limited to$__________(in words) in all; 198 Insurance On the maturity of the said term deposit, we undertake to pay to you the entire proceeds thereof (principal and interest) unless you and the said insurer shall jointly advise us in writing that the said deposit shall be held for a further term in which case we undertake to hold the same during the renewed term solely to your order and to pay to you on your first simple demand any sum which you may so demand up to the total amount of the said term deposit; and so on for any further renewals of the said term deposit. IN WITNESS WHEREOF we enclose herewith the original Certificate of Deposit No. _________ dated _________which you may lawfully keep and retain as collateral for this undertaking. DATED this ____________day of ____________20________ _________________________________ Signature on behalf of Bank, Building Society or Credit Union (Official seal to be affixed) EXECUTED BEFORE ME, ………………………………………… Justice of the Peace or Notary Public