After a six-year struggle, the European Commission (EC) has granted Bermuda bifurcated Solvency II equivalency, with a
The European Commission’s (EC) Delegated Act recognises Bermuda’s prudential framework for re/insurance and group supervision as being fully equivalent to the regulation applied to European re/insurers.
The Delegated Act was adopted yesterday and is subject to a three-month review by the European Parliament (EP) and EC.
It grants full equivalence to the jurisdiction for an unlimited period. The outcome of the review will be the result of a six-year effort by the Bermuda Monetary Authority (BMA).
Once the Delegated Act comes into force, the equivalence decision will be applied retroactively to January
The Delegated Act covers full equivalence for Bermuda reinsurers licensed as Class 3A, 3B, 4, Class C, Class D and Class E re/insurers and Bermudian insurers.
Bermuda will therefore be considered by all European member states as applying an equivalent statutory insurance regime to Solvency II.
“This is significant news for Bermuda and the island’s future as a strong financial services centre," said Jeremy Cox (pictured), the BMA's CEO.
“The world is watching to see how Europe will transform its risk industry and improve the protection of its policyholders. The world will also be watching to see how Bermuda plays its part in this epic transformation.
“It has been a long journey and an incredible amount of work has gone into this over the past six years. At the authority, we are delighted that it is now on the brink of successful completion,” he said.
Solvency II equivalence would mean Bermuda’s commercial re/insurers will not be disadvantaged when competing for, and writing, business in the EU, according to Cox.
“It is also important to note that in line with the Authority’s risk-based approach, Bermuda’s captives and Special Purpose Insurers (SPI) remained out of scope of the Solvency II equivalence assessment,” said Cox.
“This means that Class 1, Class 2 and Class 3, Class A and Class B insurers, and SPIs in accordance with our risk-based regime remain largely unchanged going into 2016,” he said.