A deposit insurance scheme to protect customers' money in the bank is set to be introduced in 2012, the Bermuda Monetary Authority's (BMA) CEO Jeremy Cox revealed yesterday.Mr Cox, who was launching the BMA's 2011 business plan to key stakeholders in the public and private sector, including banks and insurance companies, at BMA House, said that the Authority would also be implementing a code of conduct for hedge funds later this year.But he added that achieving Solvency II equivalence remained the main focus for the year ahead.Reflecting on the past 12 months, Mr Cox highlighted the BMA's first anti-money laundering enforcement action in fining First Bermuda Group $100,000 in August for breaching anti-money laundering regulations, specifically relating to customer due diligence and staff training as one of the most significant events in showing a willingness to act swiftly and effectively and follow through on its commitment to tackling the issue.He said that despite getting off to a bad start in 2011, with job losses, falling profits and reduced spending throughout the previous year and gross domestic product dropping by 8.1 percent after adjusting for inflation in 2009, as well as international business declining for the second year running, it was important for the Authority to focus on future goals, to continue to build on its resources and the advocacy of its out reach programme.Among the key areas the BMA had been concentrating on, Mr Cox said, had been insurance equivalence, consumer protection in banking and investments, resourcing and being equipped with the right supervisory toolkit, starting with an internal review of the Authority itself and its processes and plans to increase its staff to 172 by the middle of this year.He said that the BMA was working with Government to set up the Bermuda Deposit Insurance Corporation (BDIC) aimed at protecting small depositors and covering up to $25,000 per depositor, per institution.When it came to equivalence across the board for financial supervision, Mr Cox said it was crucial to create a framework that worked for Bermuda and that the Island played a key role in decision making on a global scale, particularly where Solvency II was concerned.“Certainly the Authority is going to have a very difficult year and an aggressive year in advancing on its supervisory regime,” he said.“The key word is implementation. We have the resources and we need to make sure that they have the training and skills that they need to affect it.”Mr Cox said that the next 12 months would be an intense period of activity for the Authority with a number of mission critical initiatives to be executed in all sectors while seeking recognition as a leading financial services regulator.“Alignment of our regulations with international standards, whether for banking, insurance or anti-money laundering supervision, is clearly important,” he said. “But we must ensure our frameworks remain suitable and practical for all sectors of the Bermuda market to support continued success of the jurisdiction and businesses operating from here.“We also recognise the need to assist firms in understanding the expectations related to our regulatory changes as they transition to new requirements.”He said that the BMA would continue to look at ways of enhancing operational and cost efficiencies, bearing in mind the burden placed on regulated firms while ensuring it has the right resources in place to deliver the high standard of regulation demanded by the Bermuda market and the international regulatory environment.Pointing out that the Authority had already commenced a wide-range review of all its business critical processes with a view to streamlining the execution of its supervision, he said the work would continue during 2011 and it has successfully added to the ranks of its technical staff as a result of a targeted recruitment drive at the end of last year.Turning to Solvency II, Mr Cox said: “2011 will be a pivotal year for the Authority and Bermuda as we continue with our preparations for our equivalence assessment under Solvency II. We've made excellent progress in our work plan and we are encouraged by Bermuda's successful bid to be included in the first wave of third countries to be assessed. Our plans are well advanced, which places Bermuda in a good position for this important test of our framework.”In addition he said that the BMA intended to complete a number of initiatives designed to build further resilience in the banking sector during this year, including finalising work on enhanced bank intervention powers when dealing with problem institutions and the development of a corporate governance code for Bermuda's banks and investment firms to ensure enhanced risk management practices across both sectors.Mr Cox added that the Authority planned to introduce measures to make sure its investment funds regime remained consistent with international standards.During this year, the Authority also proposes to publish best practices for hedge fund regulation based on a statement of best practices which was developed collaboratively with a number of other fund jurisdictions in 2010 and which is consistent with the International Organisation of Securities Commissioners' principles of hedge fund regulation, he said.“A key aspect of the Authority's mandate is depositor and policyholder protection,” he said. “The initiatives outlined in the 2011 business plan are designed to build on the work that has already been competed to strengthen Bermuda's banking and investment sectors, for the ultimate protection of consumers of financial products in Bermuda.”Useful websites: www.bma.bm