With that in mind, our ongoing enhancement of insurance
reference for insurance supervision, must be administered in a
industry regulations in Bermuda continues, while still maintaining
manner that is appropriate for the two key components of the
our risk-based approach to supervision. Ensuring that Bermuda’s
Bermuda insurance market, captive insurance companies and
regulation remains both effective and consistent with international
professional reinsurance companies.
standards is obviously a priority; and to date our regulatory model
Therefore, we remain committed to applying effective regulation
for insurance has worked well for the jurisdiction, a fact supported
firmly and fairly and in a manner that is appropriate for the market.
by the endorsement our approach received from the International
We also continue to uphold the high standards that have led to
Monetary Fund (IMF) after their review of the Bermuda framework.
Bermuda’s outstanding reputation as a safe, secure place in which
The IMF assessment recognised the effectiveness of most of the
to do business. Our work on reviewing Bermuda’s regulatory
framework, as well as the high level of professionalism and quality
and legislative framework for insurance also continues, to ensure
of counterparties involved in Bermuda’s insurance sector. It also
its appropriateness and effectiveness in the context of changing
acknowledged the supervisory approach taken by the Bermuda
international standards and our market conditions.
Monetary Authority (BMA) and the robust legislation underpinning
that approach.
The process of carrying through major amendments to financial
regulations and legislation is inevitably complex and time-
The IMF report did highlight some areas for enhancement as well,
consuming, even in a relatively small jurisdiction like Bermuda. This
in order to achieve full compliance with the new Insurance Core
is particularly the case given, as part of that process, our very firm
Principles adopted by the International Association of Insurance
commitment to the fullest consultation with relevant industry and
Supervisors (IAIS), and the IAIS-agreed standards for supervising
other stakeholders to address all the underlying issues and ensure that
reinsurers. As is the case with other financial jurisdictions, Bermuda
the implementation process becomes more straightforward. However,
is adapting to the dynamic international regulatory environment, but
our view is that implementation would most likely prove much less
the IMF review and other similar independent assessments confirm
effective without this detailed consultative process.
that fundamental changes to our risk-based supervisory approach for
insurance are not required.
Our goal is to get the legislation right and to be able to implement
it with the full cooperation of the sectors involved, within an
This is clearly a plus from our perspective as regulators as well
environment that still encourages business development for Bermuda-
as that of the market, since we have to date been able to enhance
based insurers. In this way, we can continue to support Bermuda’s
the framework without creating any inappropriate increase in
pivotal role in the global insurance market as an effective, stabilising
the regulatory burden on Bermuda’s insurance companies. This
force in an increasingly turbulent business environment.
is a critical point from our perspective, and is directly related
to the nature of the Bermuda market. Given the predominantly
institutional, sophisticated clients using Bermuda-based insurance
entities writing business with little or no third-party risk, the Jeremy Cox is Supervisor of Insurance at the Bermuda Monetary
application of the IAIS Core Principles, although an important Authority. Its website is www.bma.bm.
BermudaReinsurance . October 2005 39
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