23 July 2020News

BMA highlights importance of reciprocal jurisdiction status with NAIC

The Bermuda Monetary Authority’s (BMA) success in earning reciprocal jurisdiction status with the National Association of Insurance Commissioners represented a key achievement for the regulator last year and is something that offers Bermuda a long-term advantage as a domicile.

That is according to Jeremy Cox, executive chair of the BMA, writing in the regulator’s annual report, which covers the key developments and milestones of 2019.

Bermuda is one of only three jurisdictions to have secured reciprocal jurisdiction status, meaning that qualifying re/insurers are not required to post additional collateral when reinsuring US risks. “In other words, they are no longer disadvantaged when competing against companies from the European Union of UK,” he wrote.

The annual report reflected on the BMA’s five decades of service to Bermuda’s financial sector and highlighting the achievements of its 50th Anniversary year.

Cox said: “It was a year in which we reinforced our commitment to the Authority’s value proposition by rolling up our sleeves and getting the job done, effectively making good on the promises of our 2019 Business Plan—delivering results.”

Some of the other highlights noted in the report included: Completing the implementation of the Basel III capital adequacy and liquidity standards; achieving the highest score of any country assessed in relation to anti-money laundering/anti-terrorist financing since the Financial Action Task Force adopted its revised framework in 2012; and, in the context of economic substance, contributing to the work on investment funds, which aided in Bermuda’s removal from the EU’s ‘grey list’ of non-cooperative tax jurisdictions.

The BMA also saw several personnel changes last year. Cox transitioned into the role of executive chair and Donald Scott stepped into the post of deputy chair. With new board leadership came a number of new board initiatives, including a review and realignment of board committees, an expansion of the BMA’s enterprise risk management framework and a revamp of the Authority’s investment management policies, among other things.

The Authority also took several innovative steps to continue positioning itself as a regulator of the future. It implemented artificial intelligence to reduce operating costs, became a member of the Global Financial Innovation Network and further developed its Insurance Regulatory Sandbox, Innovation Hub and digital asset business framework.

Finally, the Authority used its 50th anniversary as an opportunity to expand its commitment to the wider community of Bermuda. Through various corporate social responsibility projects, the BMA partnered with 22 philanthropic organisations across the island to support them in their efforts of promoting the wellbeing of Bermuda and its residents.

Cox said the 2019 Annual Report provides: “A powerful indicator of how the Authority performed in 2019 and a poignant reminder of how it has been uniquely bound to the story of Bermuda’s financial services industry. This track record has set us up to face the unforeseen challenges, such as the global emergency we are currently experiencing in 2020.”