Bermuda, the world's leading domicile for captive insurers, will not apply Solvency II equivalency to the captive businesses domiciled there, announced the Bermuda Monetary Authority (BMA) on Tuesday.
Solvency II requirements would require captives to conform to rules about capital levels that must be maintained by insurance businesses within the European Union.
"We can definitively state that Bermuda will not apply any Solvency II-type regime to the captive sector," says Jeremy Cox, chief executive officer at the BMA. "We will introduce a risk return as part of consolidated annual filing for captives that they will submit electronically, which will create efficiencies in the process for both the market and the Authority."
He continues, "It's good for Bermuda and the market that we can make this decision based on the proven appropriateness of our regime for captives. This step, as well as the changes to our framework for the commercial sector, reflects our ability to take independent decisions on regulatory change at a pace that's right for Bermuda and according to what makes sense for our diverse market, while taking into account achieving global recognition for our supervisory regimes."
Cox says the BMA would still contribute to international developments in insurance-industry regulation and maintain strong ties to key regulators abroad while emphasizing the independence of the Bermuda market.
"There are companies here that have a global footprint," says Cox.
Bermuda does business with about 1,200 international insurers and reinsurers and maintains about 900 captive insurance companies within the domicile, according to the Bermuda Insurance Market.
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