Bermuda Monetary Authority 2026 Business Plan: Overview & Expertise – Insurance

INTRODUCTION

The Bermuda Monetary Authority’s (BMA) 2026 Business Plan (Plan) outlines continued strengthening of Bermuda’s position as a leading global insurance and reinsurance jurisdiction.

In recent years, Bermuda has emerged as a leading jurisdiction for life reinsurance with Bermuda registrants AUM well over $1 trillion. This is in addition to hosting the vast majority of insurance-linked securities transactions and a position as one of the largest property and casualty reinsurance hubs worldwide. Bermuda also plays host to a substantial share of the world’s captives, including many of which with ratings. This dominant position within the global risk-transfer market is, in part, due to BMA’s world-leading regulator for re/insurance regulation.

The Plan provides important insight into the BMA’s regulatory direction, supervisory priorities and emerging developments that will shape how insurers operate going forward and how Bermuda continues to strengthen its regime. We have highlighted key developments that are outlined in the Plan as they relate to the insurance sector and what they mean for insurers conducting business in Bermuda.

UPDATES TO THE LICENSING PROCESS FOR BERMUDA INSURERS

Under the Insurance Act 1978, as amended (Insurance Act), the BMA has responsibility for licensing new applicants seeking to be registered under the same legislation. A hallmark of the BMA’s licensing regime has been the speed at which the BMA will review, assess, and potentially approve a given application. In ideal circumstances, this process can take place in as little as one business week.

The BMA has revisited the Insurance Act application process in a BMA Information Bulletin released on 29 January 2026 (Bulletin).

The Bulletin details the role of the Insurance Assessment and Licensing Committee (IALC), the BMA body responsible for reviewing IA applications, detailing the timing and process of an Insurance Act application for potential applicants. The ‘Minimum Criteria’ is also referenced as part of the introduction, these are key principles that the BMA looks for in each applicant/application.

An avenue for pre-IALC engagement is set out in the BMA’s Bulletin, whereby applicants can seek the BMA’s input on a draft application prior to formal submission. This process, which has developed organically over time, is now expressly offered, and is intended, primarily, for applicants seeking Class C, D or E licenses (which correspond to commercial long-term re/insurers). Unique or complex applications may also seek the BMA’s feedback through this pre-IALC route which is likely to reduce regulatory friction during the formal application process.

The BMA provides detailed lists of application documentation separated by classification. This is a helpful guide for applicants that follows the proportionality principle – greater scale and complexity equates to greater regulation. As such, the respective application requirements for captive insurers (Classes A and B, and 1, 2, 3) are fewer than their more complex commercial counterparts.

The BMA Bulletin appends updated statutory forms that are required to accompany an IA application. The forms solicit basic information about the applicant’s proposed operations and service provider support. These are submitted initially in draft form, and ultimately signed by two directors and the applicant’s Principal Representative.

INTERNATIONAL SUPERVISORY STANDARDS

A principal development outlined in the Plan is the continued embedding of international insurance supervisory standards within the Bermuda regulatory regime relating to internationally active insurance groups and systemic risk oversight. This reinforces Bermuda’s alignment with global supervisory expectations and supports cross border regulatory confidence.

As discussed in the plan, the BMA plans to support the development and implementation of Bermuda’s recovery and resolution framework for the insurance sector. This includes work around recovery and resolutions preparedness, ensuring insurers can be managed effectively through stress events while maintaining financial stability and protecting policyholders.

Early this year, the BMA also enhanced the insurance group supervision framework regime, which sets out certain instances where the BMA shall be group supervisor of an insurance group:

(a)       when the insurance group is headed by a specified insurer (Class 3A, 3B, 4, C, D or E, or another class designated by the BMA);

(b)       where (a) does not apply, when the group is headed by a parent entity that is a body corporate incorporated or formed, including by way of continuation, in Bermuda, that is not itself a subsidiary of any other entity (an ultimate parent entity in Bermuda); and

(c)       where (b) does not apply, when the BMA is satisfied that (i) the insurance group is directed and managed from Bermuda; or (ii) the insurer in the group with the largest balance sheet is a specified insurer.

As a result of such changes, certain approvals and notifications applicable to insurers registered under the Insurance Act would be extended to the Bermuda holding companies that fall within the remit of supervision.

EXPLORING THE ESTABLISHMENT OF A PARAMETRIC SPECIAL PURPOSE INSURER

The BMA is continuing to explore development of new structures, including potential frameworks supporting parametric and innovative risk transfer solutions reflecting Bermuda’s role as a centre for market innovation. In early 2026, the BMA outlined the proposal for a new class of insurer, the Parametric Special Purpose Insurer (Parametric SPI) via a consultation paper. The consultation paper outlined that the Parametric SPI is designed to support alternative capital structures and provide an additional pathway for prospective registrants to enter the market.

When comparing the proposed Parametric SPI framework to that of the traditional special purpose insurers, notable enhancements include allowing swaps and derivatives to the risk profile and allowing participation with more sophisticated cedants.

The BMA’s aim with the introduction of this new class is to intensify its efforts to close the gaps associated with climate change and emerging risks. This evolution aligns with the BMA’s role in providing a credible and transparent regulatory environment that supports the continued innovation and resilience of Bermuda’s insurance sector.

INVESTMENT GOVERNANCE

Investment governance is another area of focus in the Plan with further regulatory guidance anticipated on application of the prudent person investment regime. The BMA intends on implementing enhanced public disclosure requirements on investments for the long-term commercial insurance market. This reinforces the BMA’s approach of balancing market innovation while maintaining strong oversight that maintains Bermuda’s reputation as leading regulated jurisdiction.

OUR EXPERTISE

As regulatory expectations continue to evolve alongside market innovation, access to experience Bermuda insurance counsel is increasingly critical.

Appleby’s market-leading Bermuda Insurance & Reinsurance practice is among the top ranked offshore practices in the world. Our Appleby Bermuda Insurance team services a broad array of clients from small single-parent captives all the way up to the largest P&C and life reinsurance companies in the world. Our highly experienced lawyers, also advise on a significant global market share of insurance-linked securities transactions.

Through our long-standing engagement with the BMA, and our regular involvement in regulatory application, supervisory interactions and market developments, our Appleby team is well positioned to help clients navigate regulatory change, while pursuing strategic growth opportunities in the complex Bermuda market. Our legal experts are here to advise on the most sophisticated and complex of insurance and reinsurance matters, working alongside our clients to provide solutions to meet their evolving business needs.