The Bermuda Monetary Authority (BMA) has cancelled the insurance registration of Phoenix CRetro Reinsurance Company (Phoenix), a special purpose insurer (SPI) after breaching four key areas of the Insurance Act.
The areas included not conducting any business within two years of its registration, not paying annual fees due, and not filing statutory financial statements and statutory financial statements for the years ending 31 December 2013 to 2019 inclusive.
According to the BMA, the action was taken to “safeguard the interests of potential clients of Phoenix”.
The authority viewed the breaches as “serious because of their nature and extent, and because they demonstrated systemic weaknesses of the company’s internal controls in all regards”.
The license cancellation comes after the BMA received a complaint about Phoenix’s business practices and conduct.
Based upon the findings of its investigation, the BMA no longer had confidence in the Phoenix’s ability to manage its affairs to the benefit of its potential clients or satisfy the minimum criteria as detailed in schedule 1 of the act.
Commenting on the cancellation of its registration, Phoenix stated: “Despite an important role Bermuda plays in the insurance-linked securities (ILS) environment, the country is still blacklisted as an offshore destination by regulators and central banks of Eastern European and Central Asian countries as well as Russian Federation, which makes it very hard if not impossible to operate out of this jurisdiction when developing ILS as an asset class for investors from the region.”
Following recent developments at an ILS space and regulatory endeavours of Asian hubs like Singapore and Hong Kong, Phoenix revealed: “the company shall be looking for alternative jurisdiction to continue developing its business model”.
