The European Commission has formally recognised Bermuda as fully equivalent with Solvency II.
Bermuda’s captives and special purpose insurers (SPIs) remain out of scope of the Solvency II equivalence assessment.
This means that the regulations governing class 1, 2, 3, A and B insurers and SPIs remain largely unchanged going into 2016. According to the Bermuda Monetary Authority (BMA), the insurance prudential framework for these insurers is fully aligned with the standards outlined by the International Association of Insurance Supervisors (IAIS).
Jeremy Cox, CEO of the BMA, commented: “It is extremely fortunate to have succeeded in becoming the world’s leading insurance-linked securities market, premiere captive domicile, as well as a global reinsurance and insurance hub. The authority has ensured that these important markets are being supervised appropriately.”
The regulatory standards applied to European reinsurance companies and insurance groups are now in accordance with the requirements of Solvency II, according to the BMA.
The EU legislation that will recognise Bermuda fully equivalent with Solvency II was adopted on 26 November 2015 and is currently in its three-month review by the European Parliament and council.
The legislation will cover full equivalence for Bermuda reinsurers licensed as class 3A, 3B, 4, class C, class D and class E reinsurers, insurers and Bermuda insurance groups.
Cox added: “This is significant news for Bermuda and the island’s future as a strong financial services centre.”
“Solvency II equivalence would mean Bermuda’s commercial reinsurers, insurers and insurance groups will not be disadvantaged when competing for, and writing, business in the EU. Being an early adopter of Solvency II has granted certainty to commercial reinsurers and insurers operating from Bermuda.”
