Bermuda: Bermuda Amends Insurance Act To Introduce Concept Of Internationally Active Insurance Group

The Insurance Amendment Act 2021 (Act) is the result of the Bermuda Monetary Authority's (BMA) consultation paper “Introduction of the Concept of Internationally Active Insurance Group Proposal” that was published on 21 December 2020 (The consultation paper was published in 2020, a year before the Act became operative), introducing the concept of an internationally active insurance group (IAIG) to meet the principles and standards of the International Association of Insurance Supervisors' Common Framework.

The Act which became operative on the 23 December 2021, amends the Insurance Act 1978 to make provision for supervisory requirements relating to the administration of internationally active insurance groups in Bermuda.

An IAIG is an insurance group who, subject to the BMA's determination, writes premiums in three or more jurisdictions, has gross written premiums outside of Bermuda of at least 10% of the insurance group's total gross written premiums and on a three-year rolling average it has total assets of at least $50 billion or its total gross written premiums are at least $10 billion.

The BMA may, with consultation from other authorities, determine whether an insurance group (for which the BMA is the group supervisor) is an IAIG. Notwithstanding the foregoing, the BMA may, in its discretion, determine that an insurance group for which it is group supervisor is not an IAIG despite meeting the criteria above or that an insurance group is an IAIG where it does not meet the above criteria.

The Act requires that the BMA shall give notice in writing to the relevant insurance group of its intention to make a determination on the status of that insurance group as an IAIG and shall specify the reason for their determination. An insurance group that has been determined to be an IAIG by the BMA shall continue to be subject to the requirements of group supervision.

Once designated as an IAIG, the IAIG will be subject to any rules that the BMA may make prescribing prudential or technical standards to the IAIG, and will continue to be subject to any other requirements of group supervision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.