BIMA aims to boost membership
An organisation representing Bermuda’s captive managers is seeking to beef up and broaden its membership.
The Bermuda Insurance Management Association (BIMA), whose membership has traditionally been dominated by captive management companies, is seeking to add more self-managed captives to its membership.
BIMA, which was established more than 30 years ago, is also seeking to change its constitution to allow professional service providers, such as audit firms, banks and legal firms, to become members too, according to a story in the just published Bermuda Insurance Update newsletter.
Bermuda is the world’s leading domicile for captives, which provide insurance to their corporation owners and sometimes to third parties as well.
The industry, which has built up over 40 years, faces a challenging time, with competition heating up from rival jurisdictions such as Vermont and the Cayman Islands, and the impact of global regulatory changes.
“We are quietly confident that more of the self-managed captives will become members,” BIMA president Tom McMahon told the newsletter. “I would like to see our membership over 55 by the end of the year. It is important that BIMA has a strong voice, especially lately with so many issues on the table.
“That is quite evident this year with all of the dialogue we have had with the Bermuda Monetary Authority (BMA) on the Code of Conduct and Solvency II. It is important that when we are presenting our views on such subjects that we are reflecting a more widespread consensus.
“Self-managed captives are a part of the broader captive industry and they should have a vehicle through which they can make their views known.”
Solvency II is the name given to the enhanced regulatory regime for insurers being introduced by the European Union, due to take effect in early 2013. The new rules will require higher capital requirements and higher standards of corporate governance.
The BMA is striving for “third-country equivalence” with Solvency II to ensure that the Island’s international commercial re/insurers doing business in the EU do not find themselves competitively disadvantaged.
Uncertainty remains as to how the regulatory changes will impact captives, whose managers believe they should not be subject to supervision as stringent as that exercised over large commercial re/insurers covering third-party risks, since captives’ risk profile is lower.
Mr McMahon was part of a Bermuda delegation to visit Brussels earlier this year to make the captives’ case. The more industry stakeholders there are among BIMA’s membership, the better, according to the organisation’s vice-president Lawrence Bird.
“It has been a very tough time for BIMA lately, because there have been a lot of issues out there,” Mr Bird said.
“We already have strong representation and a strong voice, but a lot of this is time-consuming and very challenging. So, the larger the organisation the more brainpower we can devote to these issues.
“We are all representatives of different companies. We still have to be on top of our regular day-to-day jobs.”
BIMA’s executive board wants to invite related professional service providers to join forces with BIMA and provide their own input.
“We are looking to expand our membership to these interested parties,” Mr Bird said. “It’s in their interests also to have a vehicle through which they can provide their views about what is happening with captives. So the Executive is proposing a change to the constitution which we will take to the membership hopefully in September.
“If approved, it will provide for a new, non-captive management type of associate membership.”