Bermuda Makes Strides On Solvency II Equivalence

by Amanda Banks, Tax-News.com, London

27 October 2011

The Bermuda Monetary Authority in its latest Regulatory Update for the third quarter of 2011 said that significant progress has been made on Bermuda's equivalence with the European Union's Solvency II principles, which require that insurance companies maintain financial buffers against the risk of insolvency.

The Authority reported that the territory "has achieved significant progress with its insurance regulation enhancements", as demonstrated in a recent report from the European Insurance and Occupational Pensions Authority (EIOPA) in its preliminary Solvency II equivalence assessment of Bermuda.

According to the Authority, the results of the assessment are that Bermuda’s regime for commercial insurers (Class 3A, 3B and 4 firms) meets the criteria for Solvency II equivalence, with certain caveats which were anticipated prior to the assessment.

The report also noted that Bermuda's standards are aligned with Solvency II principles in key areas such as the scope of group supervision and the solvency regime for groups. The Authority said that, in many respects, outstanding areas relate to supervisory enhancements that were either in progress at the time of EIOPA’s review or are scheduled to come into effect by the end of 2012.

Proposals to address other issues will be published shortly for market consultation.

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