Bermuda’s Solvency II Equivalence Takes Effect
On March 25, the BMA’s equivalency under the three measures of Solvency II became effective, and is retroactive to January 1st, the Association of Bermuda Insurers and Reinsurers [ABIR] said.
Bradley Kading, President and Executive Director of ABIR, said, “Bermuda’s robust regulation regime for commercial insurers has now been found ‘equivalent’ by the world’s largest market – the EU has given Bermuda it’s stamp of approval.
“This will benefit ABIR members in Bermuda – the red tape has been effectively removed. For example, the Bermuda Monetary Authority [BMA] is now recognized as a global group supervisor for targeted insurance groups and reinsurance can be conducted on a cross-border basis without market barriers.
“For Bermuda insurers this means an efficient rather than redundant layer of group supervision; and for reinsurers it means cross-border trade without individual jurisdictional restrictions,” noted Kading.
“The final multiple stage approval was completed with publication in an EU journal on March 4 that began a formal 20-day notice period. On March 25, the BMA’s equivalency under the three measures of Solvency II [group capital, group supervision and reinsurance regulation] became effective retroactive to Jan. 1.
“Congratulations to BMA CEO Jeremy Cox and Managing Director of Supervision Craig Swan for their leadership in completing the Solvency II equivalence project,” Kading said. Bermuda and Switzerland are the only two jurisdictions which have been found fully equivalent by the EU.
“The US National Association of Insurance Commissioners [NAIC] has also designated Bermuda and the BMA a “qualified jurisdiction” which also allows robust cross-border reinsurance trade with the US – the world’s second largest trading block,” Mr Kading noted.
“This bilateral recognition by the world’s two largest trading blocks ensures Bermuda’s status as one of the three leading reinsurance domiciles in the world, and it positions Bermuda well for continued recognition by the International Association of Insurance Supervisors [IAIS] which is currently substantially rewriting its own multilateral international regulatory standards.”
“Bermuda’s reinsurers supply approximately 40% of US and UK property catastrophe reinsurance and about 20% of EU property related reinsurance, according to various broker, statistical or academic reports.
“ABIR’s members and other Bermuda insurers have paid more than $35 billion in catastrophe claim payments to their US clients in the last 15 years. In Asia and Oceana we’ve reported 20% of the loss estimates for 2015’s Chinese Tianjin fire and explosion; 29% of the privately reinsured share of the 2011 Japanese earthquake and tsunami; 51% of the reported liabilities for New Zealand’s 2010 and 2011 earthquakes.
“As Asia’s insurance market develops more and more global insurance capacity will be needed and Bermuda’s reinsurers are well placed to help meet that need.
“The coverage provided by Bermuda’s commercial insurers and reinsurers makes insurance markets more competitive because more capacity can be offered to clients and consumers have greater choice of companies.
“Cross-border trade of reinsurance is essential for the smooth functioning of insurance markets at a time when more and more reinsurance is needed to close the Protection Gap on uninsured catastrophe losses in both the developed and developing world,” Mr Kading said.
Had it not been for the One Bermuda Alliance Government do you think Bermuda would have such recognition?
Unfair comment, Ray. This initiative started with Paula Cox under the PLP . Give credit where credit is due.
Sorry Ray but this is the work of the previous government
Actually the majority of this work was done by international business. The so dreaded foreigners making Bermuda a more stable jurisdiction.
One thing Ray we can all tell you speak from the peanut gallery !! Keep on chirpping !!
Such a very important achievement should be leveraged by IB and the Government in a high profile PR campaign for all of us to see the necessity of attracting skillful executives and their businesses to our island. This should counter the fear and anger that other entities use to drum up emotions of people that just don’t get it