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Bermuda Leads Adoption Of Insurance Reporting System

by Amanda Banks,, London

08 July 2011

Bermuda's role in the development of a new computer-based insurance reporting system has been recognised in a new report, leading its regulatory authority to stress the positive impact such software can have on the industry.

The report, released last month by the International Financial Reporting Standards (IFRS) Foundation, has acknowledged the role played by the Bermuda Monetary Authority (BMA) in the creation of eXtensible Business Reporting Language (XBRL), a system the BMA anticipates will be adopted by financial regulators globally.

Chief Operating Officer of the BMA, Brad Erickson explained that it was among the first regulators to adopt XBRL for insurance regulatory reporting and the standardized exchange of financial information between the BMA and Bermuda’s (re)insurance firms. He added: “In the IFRS report, the BMA was placed in the same category as the European Banking Authority in terms of helping to develop this cutting edge financial reporting system.”

The BMA's director, John Dill - who is responsible for IT strategy and development - said that the desire internationally to create a computer-based insurance reporting system grew out of a post-financial crisis environment in which regulators began to see a shift from information being exchanged at the document level to the data level. He noted XBRL improves the exchange of information, because it standardizes data, meaning it can be extracted and analyzed in a common format.

Dill stressed: “Since businesses in Bermuda, and elsewhere, as well as regulators are adopting this format, the Authority’s vision is that our XBRL system will enhance efficiencies in our processing of the financial information insurers submit to the Authority. This in turn will help to produce richer reporting on market trends and internal efficiencies.”

China has now announced that it too will adopt XBRL across several ministries, and the European Insurance and Occupational Pensions Authority is to use XBRL as the uniform format for Solvency II reporting across Europe. In line with this, the BMA states that Bermuda’s XBRL system has been designed to support reporting requirements for Bermuda insurers that are aligned with Solvency II.

Solvency II aims to establish a revised set of EU-wide capital requirements and risk management standards, which will replace current solvency requirements. It will be implemented from January, 2013.

Dill also explained that the BMA hopes to use XBRL to enhance the manner in which it collects, analyzes, measures and shares information for supervisory purposes. CEO Jeremy Cox concluded: “This tool will assist in initiatives such as group supervision, where timely, accurate, sharing of information could lead to more effective supervisory relationships with more effective cooperation and trust amongst supervisors as a key by-product. This project highlights the BMA's efforts to be leading edge in its use of technology and we see this initiative as not only making us more cost effective, but also more proactive, and responsive as supervisors.”

TAGS: business | accounting | insurance | Bermuda | China | offshore | international financial reporting standards (IFRS) | financial reporting | standards | regulation | European Union (EU) | Europe

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