Notice - Commercial Insurer and Insurance Groups - Amendment Rules, Schedules, Guidance Notes and Handbook (2024-03-28)

Summary

This is a BMA notice announcing the publication of a package of amendment rules, guidance notes and a handbook concluding the 2023 consultative process (CP1 and CP2) on enhancements to the regulatory regime for commercial insurers, particularly long term commercial insurers. It confirms that these instruments capture the key legislative and policy changes taking effect from 31 March 2024, with further consolidated rules and handbooks for other commercial insurer classes to follow.

• Solvency requirement amendment rules: Insurance (Prudential Standards) amendment rules covering Insurance Group Solvency Requirement, Class 4 and Class 3B, Class 3A, and Class C, D, E Solvency Requirement.
• Guidance Notes: New Guidance Notes for Applications for Adjustments Under Section 6D of the Insurance Act, and Guidance Notes for Commercial Insurers and Groups Statutory Reporting Regime.
• Handbook: The Bermuda Capital and Solvency Return 2024 Instruction Handbook for Insurance Groups, and Default and Downgrade Costs for the Scenario based approach.
• Scope of this release: Only the amendment rules and schedules are published now, and the handbook relates to insurance groups only; consolidated rules for all commercial classes and remaining class specific handbooks will follow in due course.

Commercial insurers and insurance groups falling within the affected classes should review the amended solvency requirement rules and new guidance to ensure their statutory reporting and capital and solvency return processes align with the changes effective 31 March 2024.

Key obligations

• Commercial insurers and insurance groups within Classes 3A, 3B, 4, C, D, E and insurance groups must comply with the amended solvency requirement rules from their effective date of 31 March 2024.
• Insurance groups must follow the new Bermuda Capital and Solvency Return 2024 Instruction Handbook when preparing capital and solvency returns.
• Commercial insurers and groups must apply the new Guidance Notes for the Statutory Reporting Regime and, where relevant, the Guidance Notes for Applications for Adjustments Under Section 6D of the Insurance Act.

Applies to

long term commercial insurers, insurance groups, Class 3A insurers, Class 3B insurers, Class 4 insurers, Class C insurers, Class D insurers, Class E insurers

Deadlines

• 31 March 2024: Effective date on which the amendment rules, schedules, guidance notes and handbook come into effect.