As we reported on 18 June 20151, Solvency II permits the European Commission to determine that a non-EEA country’s insurance regulatory regime is equivalent to Solvency II in three areas. On 5 June 2015, the European Commission (following advice from EIPOA) granted Bermuda provisional equivalence in respect of solvency calculations under article 227.
Provisional equivalence is granted where the country may not satisfy all of the criteria for full equivalence, but progress is being made towards equivalence and it is expected that an equivalent regime will be adopted.
On 4 September 2015, EIOPA published a progress report2 (dated 31 July 2015) setting out the latest developments in Bermuda’s supervisory regime. The report explains that Bermuda has made substantial amendments to relevant regulations since EIOPA’s advice was presented to the European Commission in March 2015, and that the European Commission requested EIOPA to undertake a further review of Bermuda’s supervisory regime.
The European Commission intends to take further decisions on equivalence later in 2015. We expect that these decisions will include a decision on whether Bermuda is fully equivalent.
It should be noted that the scope of EIOPA’s report is the same as for its March 2015 advice, so relates only to the supervision of commercial insurers in Bermuda; it does not consider the equivalence of captives or special purpose insurers.