The recent Bermuda Captive Conference was testament to the growing interest in Bermuda as a world-leading captive jurisdiction. Surging numbers of attendees had access to a concentration of experts and top quality captive service providers based in Bermuda.
As noted in the recently published Bermuda Business Development Agency press release following the conference, Bermuda is home to nearly 800 captive insurance companies, supporting primarily Fortune 500 corporations in the US, and generating over $48bn in annual gross written premiums. Bermuda also hosts agrowing number of captives from Latin America and Asia and other regions, many of which with emerging economies around the globe.
The reasons for Bermuda’s global dominance as a captive domicile are manifold. Proximity to the US, a robust and top-tier reinsurance market, stability and depth of expert service providers are among the many attractive features for prospective and existing captive owners.
Bermuda’s regulatory landscape is another selling point. Importantly, the Bermuda Monetary Authority (BMA), the body regulating captives and commercial insurers, has acted with remarkable foresight and industry sensitivity as it gained equivalence under Solvency II such that Bermuda now has ‘bifurcated equivalence’. As such, only commercial insurers are required to adhere to the modified, and arguably more onerous, regulatory requirements under Solvency II, while captives (licensed as Class 1, 2, 3, A, and B Insurers under the Insurance Act 1978, as amended) are not.
This means that the costs associated with set up and ongoing compliance with Bermuda’s top-tier regulatory regime have not increased; nor have the regulatory burdens placed on Bermuda-based captives as a result of Bermuda’s equivalence under Solvency II. Therein lies the real triumph that is bifurcated insurance regulation in Bermuda.