Insurance associations from the European Union, the UK and Bermuda have praised the European Commission’s action to find Bermuda and the Bermuda Monetary Authority (BMA) as fully equivalent for all regulatory purposes under the European Union’s Solvency II regulatory and supervisory system for insurers which takes effect on 1 Jan, 2016.
Bermuda and Switzerland are the only two jurisdictions to date that have been recognised as fully equivalent under the EU initiative. The Bermuda equivalency delegated act now stands for a 90-day consultation period with the European Council and the European Parliament.
“It is of great importance that European industrial and financial business entities have continued access to important commercial insurance and reinsurance capacity from Bermuda commercial insurers and reinsurers,” said Jo Willaert, president, Federation of European Risk Management Associations (FERMA), Brussels.
“FERMA, therefore, welcomes the decision of the European Commission to grant a full equivalence decision of the Bermudian supervisory system in relation to articles 172, 227 and 260 of the Solvency II directive.”
Willaert said that FERMA has been determined for the last five years to ensure that the coverage of risks for large European corporations remains available and affordable in order to protect the competitiveness of European industries.
“It also protects their resilience in the event of catastrophic losses as large claims payments are made into the EU economy. The protection of European businesses will be strengthened by the equivalence decision from the European Commission,” she added.
David Matcham, chief executive officer, International Underwriting Association (IUA), London, said that the Bermudian reinsurance market is an important source of diversification in reinsurance capacity for the international insurance market and for European insurers.
“Bermudian equivalence will ensure market access and be helpful for EU consumers. We'd encourage the Commission and Council to expedite their comments, if any, on the delegated act so equivalence can move ahead,” he said.
Hugh Savill, director of regulation, Association of British Insurers (ABI), London, added: “Given the close and mutually beneficial relationship between the London market and Bermuda, the publication by the European Commission of its proposals on Solvency II equivalence for Bermuda is really good news. 2016 is nearly upon us so we hope to see these proposals promptly adopted.”
Bradley Kading, president and executive firector, Association of Bermuda Insurers and Reinsurers (ABIR), Hamilton, claimed that Solvency II equivalence for Bermuda will ensure competitive markets and better prices for European businesses and consumers.
“ABIR members provide significant amounts of reinsurance capacity to European based insurers. Bermuda companies provided 20 percent of the recent UK Pool Re terrorism reinsurance placement and historically have supplied 20 percent of the European property catastrophe reinsurance market,” he said.
“In addition Bermuda insurers have covered between 20 percent and 50 percent of recent European based airline and ocean marine catastrophic losses.”
Robert Paton, president, Bermuda Insurance Management Association (BIMA), Hamilton, also said that the announcement of the delegated acts in relation to Solvency II equivalence is a “further example of the leading role taken by the Bermuda Monetary Authority in ensuring that the Bermuda Insurance and Reinsurance market remains at the forefront of global supervision.”
Solvency II, FERMA, Jo Willaert, David Matcham, IUA, Hugh Savill, Association of British Insurers, Bradley Kading, ABIR, Bermuda, London, Europe