Bermuda is the first offshore jurisdiction to be granted 'conditional qualified jurisdiction' status by the National Association of Insurance Commissioners (NAIC), the US standard-setting and regulatory support organisation created and governed by the chief insurance regulators from each US State, the District of Columbia and five US territories.

The only other jurisdictions to be afforded such status are Germany, Switzerland and the United Kingdom.

Recognising the value of the NAIC's endorsement, the Bermuda Monetary Authority (BMA) was the first insurance supervisor to accept the NAIC's invitation to participate in an expedited review of its regulatory framework.

The designation of Bermuda as a 'qualified jurisdiction' will represent a significant benefit to Bermuda reinsurers in the US insurance market with greater efficiency and less cost in conducting reinsurance business across the insurance markets, while also emphasising US confidence in the BMA as an insurance supervisor.

As a result, reinsurers licensed in Bermuda will be eligible to be certified for reduced reinsurance collateral requirements in US jurisdictions that have adopted the revised Credit for Reinsurance Model Law and Regulations (Reinsurance Models). Currently, 18 US states (including Connecticut, Florida, New York and Pennsylvania), representing 53% of direct insurance premiums, have adopted the Reinsurance Models. An additional five US states are expected to adopt the Reinsurance Models in 2014, bringing the total of direct insurance premiums of adopting US states to 75% of the US total.

The Reinsurance Models, which are part of the NAIC's effort to modernise reinsurance regulation in the US, allow highly rated non-US reinsurers to maintain reduced collateral requirements while reinsuring US cedents. Certification takes place on a state-by-state basis but a non-US reinsurer will only be certified if it is licensed and domiciled in a qualified jurisdiction.

A full review of the four approved jurisdictions will take place during 2014.

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