Consultation Paper on the Bermuda Monetary Authority's Proposed Insurance Groups Regulatory Framework (February 2010)

Summary

This is a February 2010 BMA consultation paper setting out the Authority's proposed approach to group-wide supervision of insurance groups operating in or from Bermuda. It invites industry comment on the design of the regime rather than imposing final binding rules, and states the proposals will ultimately be implemented through primary and secondary legislation, a code of conduct and guidance notes.

• Scope: The regime would initially apply to insurance groups and subgroups whose primary activity is insurance, focused on Class 4 and Class 3B insurers, with extension to the rest of the commercial insurance sector planned for the future.
• Group-wide supervisor: Describes how the BMA would determine and act as Group-wide Supervisor where no other equivalent regulator is willing or able to take that role, including for foreign subsidiaries of a Bermuda subgroup.
• Equivalence and cooperation: Sets out a proposed equivalence framework and use of supervisory colleges and information-sharing arrangements with other regulators.
• Governance and risk management: Proposes assessment of group corporate governance and risk management frameworks.
• Group solvency: Outlines a proposed group solvency assessment approach, including treatment of intra-group transactions, risk concentration, eligible capital structure, and group support as a solvency factor.
• Unregulated entities: Addresses how unregulated entities within a group structure would be treated for supervisory purposes.
• Reporting: Describes proposed group statutory reporting and filing requirements, and a group supervision timetable.

As a consultation paper, the document does not itself create binding obligations; it invited comments from the insurance industry and other interested persons, to be sent to policy@bma.bm by March 5, 2010. Firms should treat this as background on the direction of Bermuda's group supervision framework, which was to be finalised through later legislation and guidance.

Applies to

Class 4 insurers, Class 3B insurers, insurance groups, insurance subgroups, holding companies of insurance groups

Deadlines

• March 5th 2010: Deadline for interested persons to submit comments on the consultation paper to policy@bma.bm