Notice - Insurance - Class C, D and E - 2025 Global Financial Crisis (GFC) Stress Test (2025-05-30)

Summary

This BMA notice announces a 2025 Global Financial Crisis (GFC) style stress test for Bermuda commercial (re)insurers, intended to gauge market resilience to a severe economic crisis similar to the 2008 GFC. It supplements, rather than replaces, insurers' regular annual stress testing and is not used to set regulatory capital requirements.

• Scope: Applies to all BMA-regulated commercial insurers (reinsurers) in Classes C, D and E; non-insurance-bearing entities such as insurance groups are excluded.
• Dual insurers: Dual commercial reinsurers must run the GFC stress test for both long-term and general insurance segments, given recapture triggers relate to entity-level ECR performance.
• Test content: Reinsurers must calculate the impact of a GFC-style stress on financial strength, assess triggers for treaty recaptures, and identify contractually enforceable or highly plausible management actions to mitigate recapture risk.
• Out-of-scope designation: Reinsurers with no in-force reinsurance treaties at the valuation date (or otherwise agreed with the BMA) may apply by email to RiskAnalytics@bma.bm by 1 June 2025 to be designated out-of-scope; such firms must still submit a best-endeavours submission noting the lack of treaties in the Disclosure section (Sheet 4) of the template.
• Submission mechanics: The BMA has issued separate Instructions: 2025 Global Financial Crisis Stress Test detailing the stress specification and submission template/method.

Submissions are due by email using the supplied template by 16 June 2025, with a possible extension to 30 June 2025 for reinsurers who engage with the BMA ahead of the deadline and provide draft results and management actions.

Key obligations

• Reinsurers in Classes C, D and E must complete the GFC-style stress test using the BMA's supplied submission template.
• Reinsurers must submit the completed stress test by email to RiskAnalytics@bma.bm by the submission deadline of 16 June 2025, unless an extension is agreed.
• Reinsurers seeking out-of-scope status due to having no in-force reinsurance treaties must apply by email to RiskAnalytics@bma.bm by 1 June 2025.
• Out-of-scope reinsurers must still make a best-endeavours submission and disclose the lack of reinsurance treaties in the Disclosure section (Sheet 4) of the template.
• Dual commercial insurers (reinsurers) must perform the GFC stress test for both their long-term and general insurance segments.
• Reinsurers seeking the extended deadline of 30 June 2025 must engage with the BMA ahead of the original deadline with draft results and management actions.

Applies to

Class C insurers (reinsurers), Class D insurers (reinsurers), Class E insurers (reinsurers), Dual commercial insurers (reinsurers)

Deadlines

• 1 June 2025: Deadline to apply via email to RiskAnalytics@bma.bm for out-of-scope reinsurer designation.
• 16 June 2025: Submission deadline for the completed GFC stress test using the supplied template, sent by email to RiskAnalytics@bma.bm.
• 30 June 2025: Extended submission deadline available to reinsurers who engage with the Authority ahead of the original deadline with draft stress test results and management actions.