Bermuda a step closer to Solvency II goal
A final report by a Euro regulatory body has backed Bermuda’s bid for “third-country equivalence” with the EU’s Solvency II rules.
EIOPA, the EU’s insurance regulators, continued to favour Bermuda in the final version of their report, submitted to the European Commission yesterday.
The report, however, which also recommends Japan and Switzerland for equivalency, must still be approved by the European Commission.
Failure to get approval would have put Bermuda-based insurance and reinsurance companies at a competitive disadvantage when doing business in the European Union.
Bermuda Monetary Authority (BMA) CEO Jeremy Cox said: “We are happy to see the EIOPA report finalised, but note that this is phase one of a longer process.”
He added: “There is no question about our unreserved commitment to securing third country equivalence for Bermuda under the Solvency II Directive.
“Everything we have done and said points to our unequivocal pursuit of this objective.
“We are hopeful that the final decision will be favourable, because of its importance to Bermuda — and in fact, by extension, to the global (re)insurance market.”
EIOPA revealed last December that it had endorsed key parts of the Island’s own regulatory regime and asked for comments.
The final report included the views of the BMA and industry bodies on-Island and internationally.
The Association of Bermuda Insurers and Reinsurers (ABIR) told the review body: “Our members highlight the exceptional job that the BMA has undertaken in developing a modern and robust regime, already recognised by the US National Association of Insurance Commissioners as a qualifying jurisdiction and which, it would appear, is making significant strides towards being acknowledged as equivalent to the Solvency II regime.
“The BMA has developed a sound and competitive regime that attracts a supply of capital that ultimately provides reinsurance and insurance policy holder protection and delivers value to policy holders as well as to ceding companies and their underlying assured.”
The Federation of European Risk Management Association (FERMA) added that Bermuda was vital in ensuring the coverage of risks for large European corporations remained available and affordable.”
FERMA said: “It protects also their resilience thanks to important catastrophe post-loss benefits as large claims payments are made into the EU economy.”
It added: “Therefore, it is of the utmost importance for FERMA that some of its members, European industrial and financial business entities, have a continued access to important commercial insurance and reinsurance capacity from well-capitalised Bermuda commercial insurers and reinsurers.”
Lloyd’s of London added: “It is evident from this report that the Bermuda Monetary Authority (BMA) has made significant steps to update the internal regulatory system so as to align it to the Solvency II framework.” Lloyd’s said: “Commercial insurers and reinsurers in Bermuda retain a stable position in the global reinsurance market and provide important commercial insurance and reinsurance capacity to EU markets.”
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