BMA confident of Solvency II equivalence after Brussels talks

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Bermuda is on track to win Solvency II equivalence, says the Bermuda Monetary Authority (BMA) following high-level talks with European Commission officials in Brussels earlier this month.

The BMA is also optimistic that exemption of Bermuda’s captive insurance companies, which provide self-insurance for their parent corporations, from the Solvency II provisions will be honoured.

Solvency II, a new set of EU regulations, will introduce enhanced capital and corporate governance requirements for the insurance industry. There has been significant concern in the captive industry about the move, arguing that they should not be subjected to the same stringent regulations as commercial re/insurers covering third-party risks.

Bermuda’s pursuit of Solvency II equivalence has its competitors — namely Cayman and Guernsey — trying to woo captive clients away from the Island, stating they will not adopt the same strategy.

But the BMA has been steadfast in its pursuit of equivalence and following the talks in Brussels, CEO Jeremy Cox said he was pleased with the “tenor and content” of the discussion.

“I came away from the meetings with a renewed level of confidence,” said Mr Cox. “It is clear that we are on the right track, both in terms of achieving equivalence for our commercial insurers and reinsurers and in terms of securing the promised exemptions for Bermuda’s captive or limited purpose insurers.”

Mr Cox added that the meetings, which were arranged in collaboration with the Bermuda Government and the Association of Bermuda Insurers and Reinsurers (ABIR), provided a further indication that the strong relationships developed over the years have helped pave the way for the current dialogue to take place.

Shanna Lespere, the BMA’s newly-appointed director of international affairs, who was also in Brussels, said she came away from the meeting hopeful that officials will treat Bermuda fairly.

“We are not yet over the finish line so I think our continuation of a strong advocacy programme remains a critical support element to achieving our goals in Europe,” she said.

Group supervision, the merits of full equivalence, transitional equivalence, delays in Solvency II implementation and relations between Bermuda and EIOPA were among other subjects covered in technical discussions the BMA held in Brussels.

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