Consultation Paper - Introduction of the Concept of IAIG Proposal (2020-12)

Summary

This is a consultation paper issued by the Bermuda Monetary Authority (BMA) proposing to introduce the concept of an Internationally Active Insurance Group (IAIG) into the Insurance Act 1978, aligning Bermuda's framework with the IAIS ComFrame standards. It sets out proposed statutory definitions and a designation process, and is accompanied by a draft Insurance Amendment Act 2021 for stakeholder comment.

• IAIG definition: A new definition would be inserted in section 27A: an insurance group writing premium in three or more jurisdictions, with at least 10% of gross written premiums outside Bermuda, and on a three year rolling average either total assets of at least $50 billion or total gross written premiums of at least $10 billion.
• Discretionary designation: A new section 27H would let the Authority determine that a group is or is not an IAIG regardless of whether it strictly meets the criteria, after consultation with other competent authorities, and would require prior written notice to the group and an opportunity for the group to make representations.
• Continuing obligations: A group designated as an IAIG remains subject to existing group supervision requirements, and the Authority must publish the names of all IAIGs for which it is group supervisor on its website.
• Rulemaking power: Section 6A would be amended to give the Authority express power to make prudential and technical standards specific to the supervision and regulation of IAIGs, to be implemented via a future ComFrame Implementation Roadmap.

The Authority is not currently group supervisor of any IAIG, but the proposal creates the legal basis to do so in future. Additional guidance on IAIG criteria, the designation process and prudential/technical standards will be subject to separate future public consultations. Stakeholders were invited to comment on the proposals and identify practical issues, and the draft provisions were slated to enter into force on 30 June 2021.

Key obligations

• Commenters were asked to submit comments on the IAIG proposal to riskanalytics@bma.bm by 31 January 2021
• Once section 27H is enacted, the Authority must give written notice to an insurance group before determining it is (or is not) an IAIG, stating reasons for the determination
• An insurance group that receives such notice may make written representations within the period specified by the Authority, which the Authority must take into account before making its final determination
• The Authority must notify the insurance group and other relevant competent authorities in writing once an IAIG determination is made
• The Authority must publish the names of all IAIGs for which it is group supervisor on its website (www.bma.bm) as soon as reasonably practicable
• An insurance group designated as an IAIG continues to be subject to existing group supervision requirements

Applies to

insurance groups, internationally active insurance groups (IAIGs), insurers subject to group supervision by the BMA

Deadlines

• 31 January 2021: Deadline for stakeholders to submit comments on the consultation proposals to riskanalytics@bma.bm
• February 2021: A stakeholder letter summarizing feedback from the consultation process was to be published
• 30 June 2021: Date on which the new IAIG provisions (Insurance Amendment Act 2021) were proposed to come into force

Related documents

• This document amends Insurance Act 1978