On 1 October 2009 the Bermuda Monetary Authority (BMA) published three market communications outlining proposals on a variety of developments to its regulatory framework. Initially the proposals are only intended to apply to Class 4 and Class 3B insurers and reinsurers due to their high risk profiles.
The papers released were: a Consultation Paper on Eligible Capital; a Discussion Paper on the Own Risk and Solvency Assessment (ORSA) Process; and a Consultation Paper on the Insurance Code of Conduct.
The Consultation Paper on Eligible Capital sets out the approach of the BMA to determining capital resources qualified to meet regulatory capital requirement levels. The Discussion Paper on the ORSA process provides high level guidance on the BMA's approach to implementing an ORSA process within the Bermuda market. The Consultation Paper on the Insurance Code of Conduct codifies the governance standards that are already established within the jurisdiction.
All three papers highlight the shift the BMA has made in recent months to move Bermuda's regulatory regime into line with the European requirements set out under Pillar 1, 2 and 3 of the Solvency II Directive.