Guidance Note on Supervisory Colleges (June 2012)

Summary

This is a June 2012 BMA Guidance Note explaining how the Bermuda Monetary Authority conducts supervisory colleges, both when it acts as group supervisor for an insurance group or Bermuda group and when it participates as a host or member supervisor in a college led by another regulator. It sets out the Authority's approach to establishing colleges, sharing information, coordinating supervision, and managing cross border crisis situations, rather than imposing new statutory requirements.

• Establishment of colleges: The Authority will establish a supervisory college for every insurance group or Bermuda group for which it is determined to be the group supervisor, with structure and frequency proportionate to the group's size, complexity and organisation.
• Group supervisor duties: As group supervisor under Part IVA (section 27E) of the Insurance Act 1978, the Authority coordinates information gathering and dissemination, reviews group financial condition and solvency, assesses governance, plans supervisory activities (including meetings held at least annually), coordinates enforcement action, and chairs college meetings.
• Notification: Where the Authority determines it is group supervisor, section 27B(6) of the Act requires it to notify in writing the designated insurer and other competent authorities that it is acting as group supervisor.
• Confidentiality: The Authority and its staff and contractors are legally bound to keep supervisory information confidential subject to specific exceptions, and colleges are expected to operate under written cooperation, confidentiality and information sharing agreements or MoUs.
• Designated insurer role: Designated insurers of Bermuda groups are subject to reporting requirements to the Authority that support the communication channels needed for the college and for crisis management.
• Crisis management and disputes: The Authority will develop a crisis management plan for each college, coordinate external communications during emergencies, and rely on coordination arrangements (with a more formal dispute resolution framework to be developed over time) to resolve disagreements among college members.
• Regional and special colleges: Subgroup level colleges (regional or special) may be established for particular structural, sectoral or technical purposes, with the Authority keeping full college membership informed of their activities.

The note is explanatory guidance describing the Authority's supervisory practice and the statutory framework under the Insurance Act 1978; it does not itself create new filing deadlines but does describe existing statutory notification duties and expectations of at least annual college meetings.

Key obligations

• Where the Authority is determined to be the group supervisor, it must notify the designated insurer and other relevant competent authorities in writing of this fact (section 27B(6) of the Insurance Act 1978).
• Designated insurers of Bermuda groups are subject to reporting requirements to the Authority to support communication and information flow within the supervisory college.
• As group supervisor, the Authority must plan and coordinate supervisory activities, including regular meetings held at least annually, in cooperation with other competent authorities.
• The Authority and any persons employed or contracted by it must keep supervisory information confidential subject to limited statutory exceptions (section 52 of the Act).

Applies to

insurers, reinsurers, insurance groups, Bermuda groups, designated insurers, competent authorities (other insurance supervisors)

Deadlines

• at least annually: The group supervisor must plan and coordinate supervisory college activities and hold meetings at least annually or by other appropriate means.