Insurance Amendment No 2 Act 2022 Stakeholder Letter (2022-06-09)

Summary

This is a stakeholder letter from the Bermuda Monetary Authority responding to comments received on its consultation paper regarding legislative enhancements to the Innovative Long-Term Insurer Class (Class IILT) and to Section 24 requirements for dual-licensed insurers to maintain separate accounts. It sets out the Authority's responses to substantive stakeholder questions rather than imposing new binding requirements itself.

• Class IILT framework: The Authority confirms Class IILT's regulatory framework will remain aligned with the limited purpose insurer regime for now, with a flexible Bermuda Solvency Capital Requirement (BSCR) model to be published to accommodate growth in the sector.
• Reporting standards: The Authority will publish a comprehensive set of technical rules containing guidance and instructions for Class IILT insurers' annual regulatory reporting requirements.
• Economic balance sheet valuation: Class IILT insurers are not required by default to complete a full economic balance sheet valuation, though this may be required case by case depending on the company's risk profile and capability.
• Actuarial opinion basis: The approved actuary for a Class IILT insurer will opine on reserves contained in the prescribed statutory balance sheet, forming part of the Class IILT BSCR to be published later in 2022.

The letter does not itself create new filing deadlines or compliance duties beyond confirming that further technical rules and BSCR models are forthcoming; stakeholders with questions are directed to contact the Authority's policy team directly.

Applies to

Innovative Long-Term Insurers (Class IILT), Section 24 dual-licensed insurers, limited purpose insurers

Deadlines

• soon: Publication of the flexible Class IILT Bermuda Solvency Capital Requirement (BSCR) model
• later this year: Publication of the Class IILT BSCR containing the prescribed statutory balance sheet on which the approved actuary will opine