Consultation Paper - Proposed Fee Changes for 2016

Summary

This is a Bermuda Monetary Authority consultation paper proposing fee increases for 2016 under the Insurance Act 1978, with a comment deadline of 20 November 2015. It is a draft consultation, not yet a final rule, and invites industry feedback before fees are finalised.

• Scope of increase: Phase one fee increases target Class 3B and Class 4 general business insurers and insurance groups; other classes will be reviewed in a second phase for 2017.
• Estimated impact: Based on 2014 gross written premiums, most Class 3B and Class 4 insurers would see an annual business and registration fee increase of up to approximately $24,000; insurance groups would see an increase of approximately $20,000.
• Housekeeping change: A separate amendment clarifies how fees are calculated for Class 3A insurers, aligning the method with that used for other classes.
• Proposed 2016 annual fees (Annex 1): Sets out tiered annual fees under section 14(2) for Class 3B and Class 4 insurers (ranging from $209,502 to $370,000 depending on gross premium written) and tiered annual fees under section 27B for designated insurers of a group (ranging from $174,585 to $450,000).

The paper frames the increases as necessary to fund additional BMA staffing, IT capability, and international engagement (e.g. IAIS, FSB, EIOPA, NAIC) needed to maintain Bermuda's regulatory credibility and Solvency II equivalence prospects. Annex 1 fees are stated as effective 2016, with annual fees due on or before 31 March 2016.

Key obligations

• Interested parties wishing to comment must submit views to policy@bma.bm no later than 20 November 2015
• Once effective, annual fees under section 14(2) and section 27B set out in Annex 1 are due on or before 31 March 2016
• Registration fees for Class 3B and Class 4 insurers are due upon application

Applies to

Class 3B insurers, Class 4 insurers, Class 3A insurers, insurance groups (designated insurers)

Deadlines

• 20th November 2015: Deadline for submitting comments on the proposed fee changes to policy@bma.bm
• 31st March 2016: Deadline for payment of the proposed annual fees under section 14(2) and section 27B set out in Annex 1
• early Q2-2016: Planned timing for the Authority to review and consult on phase two fee increases for the remaining classes of the insurance sector