Continuing its recast of the Bermuda regulatory regime applicable to the insurance industry, the Bermuda Monetary Authority (BMA), has instituted a number of changes to its statutory and prudential reporting requirements.

The changes apply to commercial insurers (i.e. Class 3A, Class 3B, Class 4, Class C, Class D and Class E insurers) and insurance groups (Commercial Insurers) with the implementation of the Economic Balance Sheet (EBS) framework.

Effective 1 January 2016, EBS was embedded in the Bermuda legislative and regulatory regime through a variety of legislative amendments. It modified the reporting regime applicable to Commercial Insurers and, as a result, the procedure for Commercial Insurers seeking exemptions from accounting provisions or filing requirements that was previously granted by the BMA under sections 56 and 6C of the Insurance Act 1978, as amended (Act).

Previously, Commercial Insurers were required to prepare and file with the BMA statutory financial statements (SFS) under section 15 of the Act and as prescribed under the Insurance Accounts Regulations 1980 (Accounts Regulations), additional generally accepted accounting principles (GAAP) financial statements under section 17A of the Act — and a statutory financial return (SFR) under section 18 of the Act.

Commercial Insurers were able to obtain directions under section 56 of the Act, by which the BMA exempted such insurers from some or all of the requirements of sections 15 to 18 of the Act (Section 56 Direction).

Commercial Insurers were also able to be exempted from certain prudential standards in relation to their enhanced capital requirements, capital and solvency returns, insurance reserves and eligible capital imposed under rules made by the BMA under section 6A of the Act (Section 6A Rules). Exemptions to Section 6A Rules might be granted pursuant to section 6C of the Act, where the BMA concluded that an exemption did not prejudice the policyholders of that insurer and that insurer’s risk or insurance group profile deviated materially from the assumptions underlying the enhanced capital requirement (ECR) applicable to the insurer.

Read More

Share
Twitter LinkedIn Email Save as PDF
More Publications
30 Sep 2022

Time To Thrive

Against a backdrop of rising loss costs and inflation, many reinsurers remain cautious. This discuss...

30 Sep 2022

Bouncing Back: ILS Demonstrates Resilience

Bermuda remains the world-leader in ILS and as the sector becomes ever-more entwined with other form...

27 Sep 2022

Similar but Different

While the basic features of the trust remain, there are some notable differences in how trusts can b...

27 Sep 2022

Updates on Bermuda Economic Substance Requirements

The Bermuda Registrar of Companies (ROC) extended the filing deadline for those entities which earne...

18 Aug 2022

Agreements to buy land in Bermuda

The law requires that an agreement for sale and purchase of Bermuda land is in writing. 

4 Aug 2022

PIPA’s Implications For IT Service Contracts

Increasingly, businesses in Bermuda rely on the IT and data-processing services of both domestic and...

21 Jul 2022

Recent Case Clarifies Employer’s Responsibility For Severance Allowance

This article discusses the recent case of C12 Aviation Bermuda Limited v Dr. M. Bradshaw et al [2022...

13 Jul 2022

Novel Cat Bonds on the Horizon

On the back of a robust opening quarter, catastrophe bond issuance remained strong in the second-qua...

8 Jul 2022

Riding the wave

Members of Bermuda’s captive industry talk to Rebecca Delaney about the island’s promising capti...

7 Jul 2022

An LLC may be the right entity for you

Every day, we see clients choosing to incorporate a company limited by shares, often just referred t...