Bermuda has completed another milestone on its path to recognition by the European Commission as being fully equivalent under Solvency II.
The domicile has made legislative amendments to define the requirement for a commercial insurer to have a head office in Bermuda, and created authority for new public disclosure requirements for commercial insurers.
The regulations amended the existing economic balance sheet rules to expand the framework to life/long term insurers, to make technical amendments to the Bermuda Solvency Capital Requirement formula, and spelled out financial condition public disclosure requirements.
Bermuda’s Solvency II equivalence application covers the commercial insurance market, both life/health and property/casualty. Based on the definition of “commercial”, it excludes most captive insurers.
The equivalence effort was supported by the Association of Bermuda Insurers and Reinsurers (ABIR), the Bermuda International Long-Term Insurance and Reinsurance Association (BILTIR), the Bermuda Insurance Management Association (BIMA) and the Bermuda Business Development Agency (BDA).
Bradley King, president and executive director of ABIR, commented: “Equivalence findings of third countries help promote transparent and comprehensive regulation of non-EU groups with EU business operations and encourage cross-border reinsurance trade, which promotes greater competition and value for EU consumers in insurance markets.”
“ABIR members are strong supporters of the BMA’s efforts to be found fully equivalent under Solvency 2, but the real beneficiaries are EU commercial consumers which will benefit from open insurance markets.”
Seamus MacLoughlin of BILTIR added: “With [this] action on a package of substantive and technical amendments, Bermuda has completed the legislative and regulatory action that positions Bermuda to meet the caveats on the equivalence assessment as published on 30 January by the European Insurance and Occupational Pensions Authority (EIOPA).”
“These legislative changes are now being reviewed by EIOPA at the request of the European Commission, [which] will make its final recommendation in the fall.”
