Bermuda Welcomes EU Commission's Solvency II Decision
by Mike Godfrey, Lowtax.net, Washington
30 November, 2015
Bermuda's prudential framework for (re)insurance and group supervision has been recognized by the European Union as being fully equivalent to regulatory standards applied to European reinsurance companies and insurance groups under the Solvency II Directive.
The European Commission published a Delegated Act on November 26, 2015, approving of Bermuda's regime. It faces a three-month review by the European Parliament and Council before coming into force. The equivalence decision, which would apply for an unlimited period, would be retroactively backdated to January 1, 2016.
The Delegated Act will cover Bermudan insurance groups and reinsurers with Class 3A, 3B, 4, Class C, Class D, and Class E licenses.
The Bermuda Monetary Authority's CEO, Jeremy Cox, said: "This is significant news for Bermuda and the island's future as a strong financial services centre. It's an exciting time for us. The world is watching to see how Europe will transform its risk industry and improve the protection of its policyholders. The world will also be watching to see how Bermuda plays its part in this epic transformation. It has been a long journey and an incredible amount of work has gone into this over the past six years. At the Authority, we are delighted that it is now on the brink of successful completion."
"Solvency II equivalence would mean Bermuda's commercial (re)insurers and insurance groups will not be disadvantaged when competing for, and writing business in the EU. Being an early adopter of Solvency II has granted certainty to commercial (re)insurers operating from Bermuda."
Bermuda's captives and special purpose insurers were not covered by the scope of the Solvency II equivalence assessment, so regulations affecting Class 1, Class 2 and Class 3, Class A, Class B insurers, and SPIs remain largely unchanged going into 2016.
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