Bermuda has taken a step closer to securing a declaration that its insurance regime is equivalent to Solvency II.
The Bermuda Monetary Authority (BMA) has published a consultation paper setting out proposed changes to Bermuda’s insurance regime. It is understood that the BMA’s proposals were designed to address any remaining areas that the European Insurance and Occupational Pensions Authority (EIOPA) identified as deficient in its final report on Bermuda’s bid for Solvency II equivalence.
Solvency II equivalence is a key issue for multinational insurance groups that are headquartered outside the EEA but have subsidiaries or branches in the EEA, as they may be required to comply with certain aspects of Solvency II if the local regime is not considered to be equivalent to Solvency II. Therefore, questions of equivalence under Solvency II may have considerable implications for how companies structure and domicile their business.
A final decision on Bermuda’s equivalence will follow later this year. Switzerland and Japan also have applications for a declaration of equivalence in progress. We understand that Australia, Singapore, Hong Kong and South Africa are in the process of preparing applications.