Information Bulletin - The Insurance (Group Supervision) Rules 2011: Eligible Capital - Extension to Transition Period (2012-01-12)

Summary

This is an Information Bulletin from the Bermuda Monetary Authority explaining an extension to the transitional period under the Insurance (Group Supervision) Rules 2011 for insurers to bring certain capital instruments into compliance with the Authority's eligible capital standards.

• Extended transition period: The transition period for insurers to bring capital instruments into compliance with the new eligible capital standards is extended from five years to ten years, i.e. to 1 January 2024 (or such different period as the European Commission may permit).
• Nature of relief: Insurers may continue to include, until 1 January 2024, in the appropriate tier of capital, instruments that do not meet the requirement for cancellation or indefinite deferral upon a breach or imminent breach of the Enhanced Capital Requirement (ECR).
• Future rule change: The Insurance (Group Supervision) Rules 2011 will be formally amended in due course to reflect this extension.

The bulletin is informational, signalling the Authority's policy intention ahead of a formal rule amendment; it does not itself impose new compliance actions beyond the extended timeframe already being applied.

Key obligations

• Insurers must bring non-compliant eligible capital instruments (that lack cancellation or indefinite deferral features upon breach or imminent breach of the ECR) into compliance with the new eligible capital standards by 1 January 2024.

Applies to

insurers subject to group supervision, Bermuda insurers

Deadlines

• 1st January 2024: Extended deadline for insurers to bring eligible capital instruments into compliance with the Authority's new eligible capital standards (extended from the original five year period to ten years).

Related documents

• This document amends Insurance (Group Supervision) Rules 2011