Many regulated industries are required to have a Business Continuity Plan (BCP) in place and are assumed to conduct regular testing of such plan. This is particularly true of regulated industries that support the insurance space – including corporate service providers. This legislative backstop is critical in ensuring that Bermuda, being such an important jurisdiction in the global insurance market, continues to function without meaningful disruption in times of market stress.
Industry - Operations
Given the need for companies to have a relevant, tested and functioning BCP in place, Bermuda businesses are able to adapt and adhere to the evolving requirements as these unchartered waters affecting markets and the jurisdiction are navigated.
The malleability of a company's BCP and management structure has become even more important given the extraordinary speed of transmission, severity and supply shock that COVID-19 has caused on a global scale, as too has regular testing of the BCP.
From an operational perspective, even with the suspension of air travel to and from Bermuda, board meetings and annual general meetings continue to be held using electronic communication and video conferencing.
Even with the disruption caused, we continue to see insurance linked securities transactions from Bermuda issuers moving forward without interruption.
Several regulators in Bermuda have issued industry notices, outlining temporary adjustments to policy and guidelines, with direct impact to the insurance and insurance linked securities industries.
The Bermuda Monetary Authority (BMA) recognised the pandemic was causing significant operational disruptions to business globally and granted a one month filing extension for the year 2019 to all classes of insurers, insurance groups and insurance intermediaries.
The Registrar of Companies (ROC) acknowledged that some changes to Board composition may be required. The ROC stated that they will take this into account when assessing compliance, advising that entities should keep careful records of the effect of the pandemic on their businesses. Indeed, the ROC has also made commercial, pro-active changes to its ability to accept e-filings.
The Bermuda Stock Exchange (BSX) also acknowledged the impact of the pandemic and committed to remain open and trading. The BSX continues to process listing applications, and where rules require original documents to be filed, they are accepting electronic documents. The BSX advised that issuers should maintain hard copies of originals and makes these available to them when travel restrictions end. This is crucial to the insurance linked securities industry in particular as the BSX is a key part of many ILS deals.
The Government of Bermuda continues to gather, review, and interpret sufficient amounts of data which is critical to correctly respond to the changing dynamics of the pandemic. Like most affected jurisdictions, once confirmed cases were identified, air travel was suspended, quarantines were implemented and orders to close non-essential retail businesses were issued.
Adapting to the times
Bermuda's preparedness and quick response to the pandemic has allowed business to adjust and continue operations with minimal disruptions. Given the large scale global impact on supply chains and need to function remotely, it will be interesting to see what changes will be instituted by regulators, or adopted organically by industry as solutions continue to be identified.
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* Article first featured in Q1 2020 Report – Record levels of catastrophe issuance drives new market high in Q1
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