sessions, trying to come up with new ideas and new products for our clients to use, and we will definitely continue with that.


Allitt: Cyber security is an emerging risk to companies globally. The commercial market is looking for solutions, but the pricing of these risks is incredibly difficult. That’s where a captive can come in, in a slightly different way. Instead of using it as an opportunity to retain risk and participate in your own underwriting, it can actually bring the point around centralising your risk management focus into place and help you organise the company’s understanding of the risk and being able to quantify it.


Your captive could be the vehicle to do that, and then organise your thoughts for the commercial market. That’s the way you can apply these types of emerging risks to captives—it’s a big opportunity for the captive sector.


Shelby: As a regulator, our challenge is to make sure we continue to balance being flexible and open-minded with our obligation to protect policyholders and Bermuda’s reputation.


How important is the regulatory approach that Bermuda and the BMA are taking to the success of the captive sector?


Husbands: The BMA is the regulator, and we each have our separate roles, but we operate as a team. We want to succeed, we want to find the solutions, but it doesn’t mean we agree on everything. Yet we also come to a meeting of the minds in the middle to bring solutions to our clients. Right now we’re in a very good place from a regulation point of view.


Mullen: Over the last couple years the BMA has strategically steered us through what could have been difficult waters from a regulatory perspective, and landed in just the right place which has been really helpful. Strategically they’ve been excellent.


Doyle: We need a strong regulator offering certainty and consistency. Weldon and his team have been around for a time and the ease with which we can get an appointment in order for clients to discuss issues and plans and work with Weldon and his team is great. You just can’t emphasise enough how important that is because it’s the glue that keeps us all together.


We all know that in other jurisdictions you have to write in and may have to wait three or four months before you can get an appointment.


Weldon: We continue to engage with the market through the Bermuda Insurance Managers Association (BIMA). We also recognise that


44 Bermuda Finance | 2014


“Some of the Latin American clients we’re dealing with have great ideas about what to use a captive for, to help grow their business, not just to retain risk.” Jill Husbands


engagement with the service providers is incredibly important. This is why before we make any material changes to a financial sector’s regulations we actively engage with affected parties, we sit down with them and determine what is best for the Bermuda market. So it is about having a practical regulatory environment for our market, but also about meeting international standards. Bermuda’s consultative process continues to work very well.


Mullen: There is some good news as regards Solvency II. As it’s rolled out in Europe over the next few years it will also be rolled out in the captive space. The simplifications we were looking for haven’t come through, but it is apparent that individual country regulators will be allowed some leeway as to how they regulate captives. So it’ll be really interesting for Bermuda to watch what happens.


Captive managers will start talking more about insurance core principles, economic capital modelling, governance, risk and compliance. It will be a little bit of a wave that rolls across the Atlantic and we’ll begin to take best practices from what’s happening in Europe to the extent that they’re applicable. It’s a new world now with significantly higher standards of compliance and to be in that top tier of domiciles, governance and regulation need to be rock solid.


Weldon: That is an excellent point. Where Solvency II was just a regional regulatory approach, Bermuda’s focus has always been on the international standard-setting body, the International Association of Insurance Supervisors (IAIS.) We remain very focused on the IAIS and heavily involved in the development of the IAIS’s insurance core principles, which influence regulatory developments not just in Bermuda, but in every reputable jurisdiction.


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