Consultation Paper - Legislative Enhancements to Innovative Classes, Introduction of Innovative Long-Term Insurer Class (Class IILT) and Section 24 Separate Accounts (May 2022)

Summary

This is a Bermuda Monetary Authority consultation paper proposing legislative changes to the Insurance Act 1978 to create a new innovative insurer class for long-term business (Class IILT), amend section 24 rules on separate accounts for dual-licensed insurers, and make various housekeeping amendments to the innovative insurer and innovative intermediary regime introduced in 2019. It is a draft proposal open for industry comment, not yet in force.

• New Class IILT: Introduces an innovative long-term insurer class for business models incorporating digital assets, regulated similarly to Class IIGB but tailored to long-term business, with its own capital, actuarial, reporting and AML/ATF requirements.
• Section 24 amendments: Requires dual-licensed (long-term and general business) insurers to obtain prior BMA approval before transferring assets between long-term and general business balance sheets, and removes the ECR reference from sections 24(5B) and 24(5C).
• Housekeeping amendments: Proposes changes to sections 7, 6E, 15-18 and other provisions of the Insurance Act to align registration, capital and reporting requirements for existing innovative insurers (IGB, ILT) and innovative intermediaries (IA, IB, IM, IMP).
• Proposed fees: Sets out a new fee schedule for Class IILT insurers based on total assets, ranging from $25,000 for assets up to $150 million to $100,000 for assets exceeding $10 billion.

The Authority invited comments from the insurance industry and other interested persons on these proposals, to be submitted by 31 May 2022. No obligations are yet in force; changes would take effect only if and when the proposed legislative amendments are enacted.

Applies to

long-term insurers, dual-licensed insurers (general and long-term business), innovative insurers (Class IGB, Class ILT, Class IIGB, prospective Class IILT), innovative intermediaries (IA, IB, IM, IMP)

Deadlines

• 31 May 2022: Deadline for interested persons and the insurance industry to submit comments on the consultation paper to RiskAnalytics@bma.bm

Related documents

• This document amends Bermuda Monetary Authority Act 1969
• This document amends Insurance Act 1978
• This document amends Insurance Accounts Regulations 1980