BERMUDA MONETARY AUTHORITY ISSUES EXPLANATORY BULLETIN ON NEWLY CLASSIFIED “SPECIAL PURPOSE” (RE)INSURERS
Bermuda’s Insurance Amendment Act 2008 (“the Act”) became effective July 30, 2009, and introduced new licensing classes for insurers, including “Special Purpose Insurers” (“SPIs”). On October 5, 2009, the Bermuda Monetary Authority (“BMA”) issued an information bulletin pertaining to the creation of the SPI class (the “Bulletin”). The Bulletin describes the creation of the SPI class in the Act as “a platform for the establishment of full fledged (re)insurance entities, licensed to transact both indexed and non-indexed (indemnity) based event-linked structures.”
The Bulletin describes the standard characteristics of SPIs and the BMA’s regulatory approach concerning licensing, supervisory activities, and financial requirements with respect to SPIs. It also provides an overview of the regulatory approach to entities ceding to SPIs. The Bulletin describes the BMA’s establishment of an SPI Advisory Group comprised of industry representatives, signaling an effort to maintain a “working partnership” with industry in the development and implementation of the SPI class.
This post written by John Pitblado.
