At its inaugural annual meeting on 15 January 2009, the Bermuda Monetary Authority (BMA) published its Business Plan for 2009 (the Plan). This is the second year that the Plan has been made public and demonstrates the continuing drive for transparency in the work of the BMA.
The Plan noted four areas on which the BMA will focus in 2009: continuing the progress towards international mutual recognition; management of the financial crisis; implementing new anti-money laundering standards; and continued improvement of operational efficiency.
Matthew Elderfield, the chief executive of the BMA, reported that although 2008 had been a difficult year for the industry, the Bermuda insurance market had risen to the challenge and that the aim throughout 2009 would be to continue this progress.
Mutual Regulatory Recognition
The BMA will continue its work towards its goal of mutual recognition, particularly with respect to the European and US markets. More specifically, the Plan reveals that the BMA aims to develop a framework for group supervision, enhancements of supervisory and public disclosure standards and consultation on aspects of Pillar 2 of the Solvency II Directive, namely a qualitative review of risk management by both firms and supervisors.
Mr Elderfield was careful to point out that the BMA will not be simply importing overseas standards into the Bermuda insurance market, but will be making a conscious effort to tailor them specifically to the market through consultation with market participants.
Managing the financial crisis
The Plan explains that due to the resilience of the market during 2008, the BMA's approach to monitoring the crisis will continue in the same vein during 2009 through soft tactics such as market surveys, stress tests and on-site reviews to identify firms for close monitoring. The Plan also highlights the implementation of the Basel 2 framework for banks and some investment businesses as well as further enhancements to the solvency regime for insurers to make sure the BMA stays on top of the crisis.
Anti-Money Laundering
During 2008, the BMA developed broader supervisory and enforcement powers with regard to anti-money laundering and anti-terrorism financing. In 2009 however, the BMA will change tack on its stance from policy making to on-site reviews of the anti-money laundering standards employed in the industry. A dedicated team will be established to carry these reviews out and will provide feedback to the market on whether the standards are being implemented correctly.
Operational Efficiency
In order to continue to provide a high level of service to its stakeholders, the BMA revealed that it will now be publishing service standards with regard to specific regulatory transactions rather than generally across the market. The BMA also committed itself to a greater use of information technology in areas such as e-filing to improve efficiency within the market.