The Bermuda regulatory authority has set the standard for captive regulation worldwide, according to Tom McMahon, director of Citadel Reinsurance.
Speaking at the 2018 Bermuda Executive Forum, McMahon said over the last 25 years he had seen a growth in the domicile’s captive regulation and noted that it was a global leader in the sector.
He commented: “I think the Bermuda regulatory authority has set the standard for captive regulation worldwide.”
“I have no hesitation saying that because of the way I have seen it evolve over the last 25 years.”
Also speaking at the event, Chiara Nannini, director, Conyers Bermuda, explained that there had been some subtle, yet important, changes in the Bermuda captive market recently.
She said: “Captives now can file an electronic filing statement for the purposes of filing their annual returns. That has been beneficial in that it allows the Bermuda Monetary Authority to more easily collect data on a captive and its filings—I understand that is relatively novel in that space.
“Insurance managers are required to file an annual return and are caught under the scope of the anti-money laundering regulations for financial institutions.”
“They’re required to effectively have an anti-money laundering and anti-terrorism financing audit. That will extend to insurance brokers and agents next year as well.”
Nannini added: “On top of that captives are now, like commercial insurers, prohibited from carrying on any business other than insurance business, unless it is auxiliary to that insurance business.”
“There are definitely more changes coming with regard to the EU economic substance.”
Mike Parrish, head of business development for Marsh Management Services Bermuda, stated: “The regulatory changes have made it more rigorous and the administration tougher but they have kept pace with the requirements on domiciles these days and the general overview that organisations have.”
“I think they have been a necessity and Bermuda has passed the test in that regard.” “Everyone in Bermuda takes their responsibilities and the reputation of the domicile very seriously.”
“People may complain about the level of compliance but deep down they will recognise that it is reasonable and required to protect the reputation of Bermuda.”