The Bermuda Monetary Authority (BMA) has cancelled the insurance registration of Phoenix CRetro Reinsurance Company, a special purpose insurer (SPI), for breaches of the Insurance Act 1978 (Insurance Act).
The BMA noted that Phoenix had not conducted any business within two years of its registration and had not paid the annual fees that were due. Neither had it filed statutory financial statements or returns for the years ended December 2013-2019 inclusive.
Kirill Savrassov, chief executive of Phoenix CRetro, acknowledged the strength of Bermuda’s insurance linked securities (ILS) offering, but said it had become impossible to operate out of the jurisdiction.
Phoenix has been engaged in developing ILS for the Central Asian, Eastern European and Russian markets, where Bermuda is still blacklisted as an offshore destination by regulators and central banks, Savrassov said.
It is “very hard, if not impossible, to operate out of [Bermuda] when developing ILS as an asset class for investors from the region,” he added.
With Asian hubs like Singapore and Hong Kong having made strides as ILS hubs, Phoenix “will be looking for an alternative jurisdiction to continue developing its business model,” Savrassov said.
The BMA said it had taken its action after receiving a complaint about Phoenix, arguing the breaches demonstrated systemic weaknesses of Phoenix’s internal controls. “Based upon the findings of its investigation, the [BMA] no longer had confidence in [Phoenix’s] ability to manage its affairs to the benefit of its potential clients or satisfy the minimum criteria [of the Insurance Act]” it said.
Bermuda Monetary Authority, BMA, Phoenix CRetro Reinsurance Company, Kirill Savrassov