BMA releases proposed changes to regulatory & supervisory regime

The Bermuda Monetary Authority (BMA) is proposing to make enhancements to the regulatory and supervisory regime for commercial insurers and insurance groups that register on the island.

The BMA has therefore published a new consultation paper on its website, giving details of the proposed changes.

The Authority said that it strives to ensure that the cornerstones of the regulatory regime for commercial insurers continue to be sound, serving the double goal of protecting policyholders and contributing to financial stability.

It added that it also seeks to ensure that the framework continues to capture risks and detect new risks while serving the needs of the Bermuda market. For this purpose, the Authority continually monitors trends and market developments, including evolving risks and business models. Like other peer regulators, the BMA assesses the adequacy of existing regulatory tools to ensure it continues capturing the risks and enhancing the level of disclosures and transparency.

The BMA stated that it also: “seeks to revise the fees charged to long-term commercial insurers to meet the necessary cost of supervision and enable it to have the appropriate level of resources, tools and processes to supervise insurance entities effectively. The bulk of the fee increases is aimed at bringing the annual business fee and registration fees charged to long-term commercial insurers in line with the fees charged to commercial P&C insurers. The proposal also includes fees for long-term Internationally Active Insurance Groups (IAIG).”

The Authority is now seeking the views of the insurance industry and other interested persons on the proposals set out in its consultation paper and is encouraging commercial insurers to field test the proposals using the template that was released on 27 February 2023.