IFA’s representing investment insurance policyholders have written the Bermuda Ministry of Finance (the Minister of Finance is also the Prime Minister Hon. E. David Burt), requesting a government enquiry into how the regulator (“BMA”), and specifically officers Gakundi and Davis-Crockwell, have acted capriciously to damage insurance business and their end clients.
A large client of Custodian Life Limited, with over 200 policyholders holding their investments in this Bermuda entity, have seen the BMA unilaterally ignore a history of clean audits by KPMG and issue unilateral suspension of business, then petition the High Court to place Custodian Life into provisional liquidation. In doing so, the BMA broke Bermuda laws allowing Custodian Life to legally appeal their decision within the statutory required 1 month, instead delaying any response for almost one year, resulting in Custodian Life being unable to file its annual accounts. This deliberate delay then allowed the BMA to cite the non-filing of audited accounts for a court liquidation petition, whilst ignoring Custodian Life’s management communications and industry expert presentations. Custodian Life, a Bermuda-licensed insurer serving over 2,000 policyholders, has successfully and profitably operated since its launch in 2013.
The appointed Joint Provisional Liquidators have billed Custodian Life US$ 1 million every 6 months, draining the company of funds, financially damaging the Custodian Life shareholders and the business itself, also significantly reducing available funds for policyholders.
Meanwhile, a global international insurer Newpoint Financial is bringing a legal action against the BMA, and officers Gakundi and Davis- Crockwell in the Californian courts, citing tortious business interference over a previously attempted buy out of a Bermuda insurer, compromised by the BMA’s alleged regulatory obstruction, that ultimately led to the collapse of a Bermuda insurer, costing investors and policyholders millions.
“This is not an isolated incident,” said a representative from an IFA advisory group. “Bermuda’s regulatory credibility is under threat. If the BMA continues to operate without oversight, more companies will be driven out, more policyholders will suffer, and Bermuda’s reputation will take a hit on the global stage.”
A major cornerstone of the BMA Law of 1969 is the orderly protection of end clients, something that Gakundi and Davis-Crockwell are allegedly ignoring, to the detriment of such clients and Bermuda’s reputation as a financial centre. With the Ministry of Finance the supervisor to the BMA, a growing groundswell of Custodian Life policyholders are filing complaints about the BMA, as well as complaining to the Bermuda Ombudsman. “The BMA is supposed to protect policyholders, not create unnecessary financial distress,” said a spokesperson from the group of IFAs advocating for an inquiry.
