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Bermuda Receives Recognition For Solvency II Effort

by Mike Godfrey, Tax-News.com, Washington

17 September 2012


Bermuda's efforts to achieve equivalency with Solvency II were recognized at the recent Captive Live USA 2012 conference, held in Chicago on September 10-11, 2012, where the island was awarded for regulatory excellence.

Representatives from the island's promotional agency, Business Bermuda, attended to drum up business for the territory, and to discuss the efforts the island is undertaking to bolster its position as a world-leading captive insurance domicile. Business Bermuda CEO, Cheryl Packwood, was on hand, on behalf of the Bermuda Monetary Authority (BMA), to accept the US Captive Services Award 2012 for Best Regulatory Initiative of the Year.

Welcoming the award, Packwood said: “We are excited that our jurisdiction has been recognized for the Bermuda Monetary Authority’s work as having the Best Regulatory Initiative of the Year. The amount of key decision makers, industry leaders, and lawyers at this event, in only its second year, is testament to its growing success. We are extremely pleased to be an active participant in this major conference.”

Shelby Weldon, Director, Licensing and Authorization at the BMA, added:

"The BMA being awarded Best Regulatory Initiative of the Year relates primarily to the Authority's work on regulatory equivalence, most recently working towards gaining equivalence for Bermuda's insurance regulations with Solvency II."

"This has involved making strategic changes to Bermuda's commercial sector regulations, that make sense for the type of business conducted in our market while also being aligned with Solvency II principles. It also includes ongoing dialogue with European authorities and decision-makers to generate understanding about Bermuda's risk-based regulatory approach, which effectively differentiates between commercial and captive insurers based on their vastly different risk profiles."

"The outcome of the European Insurance and Occupational Pensions Authority's equivalence assessment for Bermuda was a major milestone for the jurisdiction. They found our commercial sector regulations largely equivalent, with the captive regime being out-of-scope. The European Commission has also subsequently confirmed that they have the ability to grant bifurcated equivalence. This is further indication that the diversity of sectors in Bermuda's market - captive vs. commercial - can be properly recognised in the equivalence process."

Recognition from the key US market is particularly pertinent given heightened competition in the captive insurance market, as the Cayman Islands announced this year that it seeks to challenge Bermuda's market dominance, and differentiate itself on Solvency II. The Cayman Islands is to target the market but not equivalency with Solvency II in a move that may potentially attract business from insurance entities seeking to avoid the stringent capital requirements attached to Solvency II.

A comprehensive report in our Intelligence Report series which studies the 20 main offshore jurisdictions which offer captive insurance regimes is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report11.asp
TAGS: law | insurance | international financial centres (IFC) | Bermuda | offshore | captive insurance | regulation

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