A number of Bermuda registered (re)insurers operate within a group structure. This means that an insurer’s financial position and risk profile, and its overall prudential position, may be impacted by being part of a group, both positively and negatively. Therefore, the Bermuda Monetary Authority has established a group supervision framework for insurance groups. Currently there are approximately 20 insurance groups for which the Authority is the Group Supervisor, since their primary operations are controlled and managed from Bermuda.
The Authority derives its powers from, and conducts its responsibilities as Group Supervisor under, the Insurance Act 1978 (the Act), as amended; amendments to establish the group supervision framework became effective in March 2010.
Other legislations governing group supervision are the Insurance (Group Supervision) Rules 2011 and the Insurance (Prudential Standards) (Insurance Groups Solvency Requirement) Rules 2011.
All of Bermuda’s insurance groups that are subject to supervision are internationally active. Therefore, Bermuda’s group supervision framework reflects international developments in this area and principles for insurance group supervision adopted by the International Association of Insurance Supervisors (IAIS).
The main objectives of group supervision include:
Therefore, key areas of focus within the group supervision framework are:
The Authority’s Insurance Supervision department conducts its functions as Group Supervisor under the Act, which include:
The Authority has issued information and guidance that provides details of how it:
The guidance is summarised below and can assist companies identified as Bermuda groups as they transition to compliance with the group supervision framework.
These include how the Authority:
The Authority establishes a supervisory college for every group for which it is Group Supervisor. Supervisory colleges are designed to provide a platform for:
The guidance provides details on the governance and operational processes of supervisory colleges, including the use of memoranda of understanding and confidentiality agreements, as well as rules of engagement for decision-making, dispute resolution and supervisory cooperation.
Pursuant to section 27H of the Insurance Act 1978, the Bermuda Monetary Authority is the Group Supervisor of the following IAIGs: