Bermuda Insurance Companies
Bermuda’s Regulatory Framework
A Bermuda insurance company is regulated by the Insurance Act 1978 and Related Regulations as amended (‘Insurance Act’) and the Companies Act, 1981. The Insurance Act requires that every insurer conducting business in or from Bermuda be registered. This approach to regulating the insurance industry in Bermuda recognizes that different types of insurance companies require different approaches, thereby introducing flexibility into the regulatory process and a ‘risk based’ approach to regulation and supervision.
The Bermuda Monetary Authority has published a Statement of Principles (‘the Principles’), which has been made pursuant to section 2A of the Insurance Act 1978 (‘the Act’). The Principles relate to the Authority’s decisions on whether to register an entity, cancel the registration of a registered entity, impose conditions upon a registration or give certain directions to a registered entity. These Principles are of general application and seek to take into account the wide diversity of registered entities that may be licensed under the Act, as well as relevant institutional and market developments.
An insurer may be registered to conduct either long-term business (life, certain annuity and personal injury contracts) or general business (everything that is not long-term business). Different regulations apply depending upon the type of business conducted by the insurer.
The different classes of insurance licenses for general business have been established in recognition of the diversity of insurers currently operating from Bermuda. It must be noted that within each license class different regulations apply.
Towards Solvency II Equivalence
The European Insurance and Occupational Pensions Authority’s (EIOPA) preliminary assessment of Bermuda’s regulatory framework, in relation to Solvency II, received preliminary approval with respect to commercial insurers (Class 3A, 3B and 4) meeting the criteria for Solvency II equivalence in key areas such as the scope of group supervision and the solvency regime for groups while distinguishing Bermuda’s captive sector regulations.
Classes of Insurance Licenses
For those insurers conducting general business, the Insurance Act has introduced different classes of insurance licenses, namely:
Contact us for legal assistance setting up a Bermuda insurance company or review our Memorandum on the Incorporation of a Bermuda Insurance Company (all classes).