Ongoing delays with Solvency II implementing measures in Europe mean Bermuda will not be notified of whether it is considered equivalent to the new regulatory regime until the end of next year at the earliest, the head of its insurance regulator believes.Jeremy Cox, chief executive of the Bermuda Monetary Authority (BMA), told members of the Bermuda Insurance Institute (BII) the island “will probably have to wait a little longer” until European assessors deliver their verdict, following recent delays at the start of the legislative process, including the pushing back of the timing of the Omnibus II vote until September.
Cox said such news is “not in the least surprising”, adding although the introduction of the directive is important, with Bermuda continuing to pursue equivalence “vigorously”, it is not the regulator’s “final objective”, rather “it is one of a range of regulatory goals we are committed to achieving”.
Cox continued: “Yes, we understand access to the EU is business critical to the underwriting platforms of our commercial insurers and reinsurers.
“There is no question Europe and its buyers of risk-transfer and risk-management products are very important to us. But so too is North America and the many buyers of risk solutions and captive programmes that have long been a bread-and-butter staple of our market.”
He told the BII audience there is still no other location in the world that has the business profile of Bermuda’s market, calling it “a massive concentration of captive insurers and captive managers and a major centre for commercial risk-transfer capacity”, adding: “That remains a huge magnet for business, along with our reputation for expertise, integrity and speed to market.”
He also tried to calm recent concerns the proposed introduction of the Solvency II Directive could negatively affect the island’s burgeoning captive sector. Cox said stakeholders should feel more comfortable in light of recent undertakings by the European Commission’s head of unit for insurance and pensions, Karel Van Hulle, that “segmented equivalence” will be permitted and a “carve-out for our captive sector makes sense”.