Notice - Joint Stress Test Exercise with the PRA (2019-06-18)

Summary

This notice announces a joint stress test exercise between the Bermuda Monetary Authority (BMA) and the UK's Prudential Regulatory Authority (PRA) covering natural catastrophe and economic scenarios for Property and Casualty (P&C) insurers. It targets a selected sample of large Bermuda commercial insurers with material natural catastrophe exposure in the UK and globally, aiming to test resilience and understand interconnectedness between the London Market and Bermuda-based reinsurers.

• Participants: A sample of large Bermuda commercial insurers classified as Class 4 and Class 3B, with material natural catastrophe business in the UK and globally, have been selected to take part.
• Purpose: To test resilience of P&C insurers operating across UK and Bermuda, enhance understanding of cross-jurisdiction interconnectedness, and inform and prioritise supervision of the largest insurers.
• No capital impact: The exercise will not be used by the PRA or BMA to set additional capital requirements on insurers; results will instead inform supervisory work.
• Submission deadline: Participating insurers must submit their responses by Monday 30 September 2019.
• Publication of findings: The BMA and PRA intend to publish aggregate-level findings, including sectoral or market-level learnings, during Q1 2020.

This is an informational notice describing a supervisory exercise rather than a standalone rulemaking; it applies only to the specific sample of selected Class 4 and Class 3B insurers invited to participate.

Key obligations

• Selected Class 4 and Class 3B Bermuda commercial insurers participating in the joint exercise must submit their stress test submissions by Monday 30 September 2019.

Applies to

Class 4 insurers, Class 3B insurers, Property and Casualty (P&C) insurers

Deadlines

• Monday 30 September 2019: Deadline for participating insurers to submit their joint stress test exercise responses to the BMA and PRA.
• Q1 2020: Intended timeframe for the BMA and PRA to publish aggregate-level findings from the joint stress test exercise.