We Have Regulators Too, Bermuda's Insurers Say
The companies' trade group points out that their home has rigorous oversight standards, and taxes.
The life and annuity insurers and reinsurers of Bermuda want the world to know something: Bermuda has insurance regulators, too.
The companies’ trade group, Bermuda International Long Term Insurers and Reinsurers, has posted a paper that makes the case for why Bermuda is a sophisticated, attractive insurance regulatory jurisdiction, not primarily a place where U.S. life and annuity send business to cut capital needs and lower income taxes.
What it means: Trade group members want insurers and clients to know that life and annuity products with ties to Bermuda-based companies are subject to careful regulation by the Bermuda Monetary Authority, the country’s financial services regulatory agency.
The history: Bermuda has been a reinsurance center for decades, and it has become a major center for life and annuity reinsurance in the past two decades.
Even traditional U.S.-based insurers have been establishing subsidiaries and “sidecars” in Bermuda.
Some have suggested that the main appeal is that Bermuda is more flexible about how it scores the riskiness of various types of investments than U.S. insurance regulators tend to be.
Some policymakers have asked whether it’s possible that life and annuity business based in Bermuda could be riskier than business written by or reinsured by companies with official “domiciles,” or homes, in the United States.
The paper: The European Union has recognized the BMA’s regulations and oversight efforts as being equivalent to the European Solvency II system, and the National Association of Insurance Commissioners has recognized Bermuda as a qualified jurisdiction and a reciprocal jurisdiction, BILTIR says in the new paper.
In the past, some observers outside Bermuda complained that Bermuda had no corporate income tax. Now, BILTIR says, Bermuda has a 15% corporate income tax rate that’s set to take effect in 2025.
“At 15%, the rate meets international expectations while remaining competitive,” BILTIR says.
BILTIR members have about $1 trillion in total assets, and assets exceed liabilities by $231 billion, BILTIR reports.
Hamilton, Bermuda. Credit: Andrew F. Kazmierski/Shutterstock