BMA consultation: Strengthening group supervision in Bermuda's insurance sector
1. Mandatory group supervision for Bermuda-based groups
The BMA would require mandatory supervision of insurance groups with ultimate parent entities incorporated in Bermuda. This ensures comprehensive oversight of such groups’ global operations. Groups will be notified, and representations considered before supervision begins.
Consultation question: Do you have concerns about mandatory supervision for Bermuda-based groups?
2. Withdrawal as group supervisor
The BMA proposes clearer rules for stepping down as group supervisor when criteria, such as the location of the ultimate parent, are no longer met. This ensures seamless transitions without regulatory gaps.
Consultation question: Are there challenges with the proposed withdrawal process?
3. Defining and registering insurance holding companies
The term "insurance holding company" would be formally defined, and the BMA would register and designate key holding entities for group supervision. Registration will involve no fees, with names published for transparency.
Consultation question: Do you support the definition and registration of insurance holding companies?
4. Supervisory powers over holding companies
The BMA seeks direct powers to supervise designated holding companies, including imposing penalties, objecting to officer appointments, and managing compliance. Proportional enforcement ensures fairness for groups of varying complexity.
Consultation question: Are the proposed powers sufficient and appropriate?
5. Oversight of shareholder changes
The BMA would require prior notification of shareholder control changes or major structural adjustments like mergers. This oversight ensures group stability and policyholder protection.
Consultation question: Are there concerns about notification requirements for material changes?
6. Transition period and amendments
In addition to the proposals above, the BMA has suggested consequential amendments to various statutory instruments, including replacing references to 'designated insurer' with 'designated insurance holding company.'
Existing structures will not be grandfathered, but a one-year transition period will be provided to allow insurance groups and the BMA to prepare for these enhancements.
The industry is invited to provide feedback on the proposals by 15 January 2025.
The consultation paper can be found here.
