Insurers will have to comply with tighter regulations if a bill tabled in the House of Assembly on Friday is approved.

The changes will mean that certain professionals providing services ? namely auditors and loss reserve specialists ? will have to be approved by regulators at the Bermuda Monetary Authority (BMA).

In addition, spouses of executives will now be prohibited from drawing down personal loans from the company they work for ? something executives are already bound not to do by law.

Reporting requirements are also set to change under the legislation ? called the Insurance Amendment Act 2004 ? which ultimately makes changes to the Insurance Act 1978.

Speaking of the changes last week, Finance Minister Paula Cox said the amendments were designed to ensure that the BMA?s insurance supervisory regime was effective; appropriate for the scope and nature of the industry in Bermuda and consistent with evolving international standards.

Ms Cox said that it was important that they introduce the changes now if the Island was to be recognised as having addressed certain areas of concern raised in the process of a review from the International Monetary Fund (IMF), before it was finalised.

?The IMF review process allows for full credit to be given for amending action implemented prior to finalisation of the report,? she said.

The review was started last year and Government said earlier this month that a final version of the IMF?s findings were expected by the end of 2004, and would be made public.

Ms Cox said further revisions to the Insurance Act could follow as early as when the House reconvenes after the summer recess.

?This is the benefit of the recess ? it provides some scope and opportunity for additional input and dialogue.?

The amendments currently being considered were said by Ms Cox to follow consultation with the insurance industry itself and the Government-appointed Insurance Advisory Committee.

She added that some of the concerns raised in the IMF review to do with supervision of the Island?s insurance sector were previously addressed in the Investment Business Act 2003, which took effect on 30 January, 2004.

The changes in the Insurance Amendment Act 2004 mean that insurers will only be able to engage auditors and loss reserve specialists that are first approved by the Authority, as new standards for the independence of auditors are made law.

The removal or replacement of a company?s auditor must also be proposed in writing to the BMA.

Insurers will also be bound to notify regulators at the Bermuda Monetary Authority (BMA) on certain matters within a shortened period of time ? now 14 days. And financial statutory returns will now have to be sent to the Authority at the same time as financial filings are made.

The exception are those companies with a class one insurance licence ? generally single parent captive companies ? which are bound to file statutory financial statements once a year.

The costs of investigations will now also have to be borne by any insurer coming under the BMA?s scrutiny.