Bermuda’s fast-growing life reinsurance sector has caught the attention of the Trump Administration.

Scott Bessent, the US Treasury Secretary, met with insurance regulators to talk about the industry’s exposure to private credit — partly through the island’s life and annuity reinsurance companies.

The meeting with the National Association of Insurance Commissioners, a standard-setting body composed of state insurance regulators, took place on Thursday.

Bermuda’s burgeoning life reinsurance industry managed $1.52 trillion in assets as of September last year, according to Bermuda Monetary Authority data.

Industry body, Bermuda International Long-Term Insurer and Reinsurers, has reported that more than 80 per cent of the sector’s ceded business is sourced from the US.

Many of Bermuda’s long-term reinsurers are either owned by or affiliated with private-equity firms, leading to regulatory concerns about how their assets are managed and whether they are sufficiently liquid to meet a surge in policyholder withdrawals.

US regulators are also concerned about the increased private-credit exposure of US life insurers. Last month, the NAIC reported that US insurers held $276.8 billion in collateralised loan obligations at year-end 2024, up about 2 per cent from year-end 2023, representing about 5.1 per cent of total bonds held.

A statement after Thursday’s meeting from the US Treasury Department said: “Secretary Bessent emphasised the need for fit-for-purpose regulation that encourages innovation while appropriately managing risk.

“Treasury and the state insurance commissioners agreed to continue staff- and senior-level engagement on topics including the NAIC’s work on risk-based capital, private letter ratings, offshore reinsurance jurisdictions, and the oversight of evolving business models.”

According to a statement by the NAIC, Mr Bessent told the state regulators: “This administration is a strong supporter of the state-based system of insurance regulation and supervision, and I appreciate the work that each of you do every day in your states to protect American consumers.

“Like all of you, my team at Treasury is monitoring the transformation of the US life insurance industry and trends in private credit. I look forward to our continued engagement as we monitor the developments in both markets.”

NAIC president-elect Elizabeth Dwyer said “We appreciated the opportunity to meet with Secretary Bessent and share how state insurance regulators are leveraging effective oversight and enhancing risk-mitigation frameworks to promote stable markets and deliver strong outcomes for consumers.”

Regulators from the US, Britain, Japan and the European Union have increased their scrutiny of the sector as life and annuity insurers from their countries have offloaded blocks of pensions and annuities to Bermudian reinsurers in a series of multibillion-dollar deals.

Speaking on a panel at last month’s BMA Forum, Petra Kielhema, chairwoman of the European Insurance and Occupational Pensions Authority, warned the industry to “be ready for more visibility”.

She added: “More and more the insurance industry is involved in alternative investments that trigger a lot of attention from supervisors, and that means there will be a lot more need for convincing, sometimes even other regulators, that what is happening in the industry is controlled, is managed and is still prudent and in the interest of consumers. It’s happening and it’s going to be more so.”

Bodies including the International Monetary Fund have also raised concerns about the potential for systemic risk as the insurance and private equity industries become more intertwined.

The BMA, the island’s financial regulator, has responded by strengthening oversight of the long-term reinsurance sector, increasing disclosure requirements.