The Bermuda Monetary Authority (BMA) is preparing to implement new rules requiring life insurers operating in the territory to disclose more detailed information about their investment portfolios.
The move comes as global regulators focus on potential risks linked to offshore reinsurance transactions.
Bermuda has long been a reinsurance hub, notably for hurricane coverage, but its life insurance sector has grown into a key global player. The sector now manages over US$1 trillion in assets tied to annuities and other long-term savings products.
According to the Financial Times, the island’s less stringent capital requirements for less liquid investments have attracted a wave of offshore reinsurance transactions, particularly from private equity firms like Apollo and KKR, which have established large Bermudian insurers.
Concerns about liquidity, counterparty risks, and other issues associated with offshore deals have led to increased scrutiny by global regulatory bodies. The BMA has been publishing reports on these risks, including liquidity issues and private equity-linked insurers, in an effort to improve market understanding and encourage discipline.
In a statement, the BMA announced plans to enhance its transparency efforts by requiring commercial life and annuity insurers to disclose more detailed information about their investments annually.
This initiative aims to deepen market understanding of insurers' investment strategies. A consultation on the proposed rules is expected to begin soon.
Bermudian insurers currently publish financial documents, some of which are available through the BMA’s website. However, the new proposals are likely to mandate more detailed reporting on investment portfolios, including assets connected to insurers’ owners or affiliated entities, according to a source familiar with the matter.
Recent challenges involving Bermudian reinsurer 777 Re, owned by a private equity firm, have heightened regulatory concerns. The company faced a crisis after accumulating significant exposure to assets tied to Josh Wander’s Miami-based investment firm, including stakes in football clubs and budget airlines. The fallout affected US insurers that had ceded billions of dollars in assets to 777 Re.
In response, the BMA has intensified its oversight, increasing data collection and conducting more on-site examinations of affiliated and related-party assets.
Suzanne Williams-Charles (pictured above), chief executive of Bermuda International Long Term Insurers and Reinsurers (BILTIR), expressed support for greater transparency, noting that some of the information being considered for public disclosure is already reported to the regulator.
Bermudian insurers, she said, are “committed to serving the needs of their customers which includes ensuring that policyholders and other stakeholders are both informed and able to make appropriate choices.”
Bermuda’s Premier David Burt has also addressed regulatory concerns, stating that the territory has tightened its rules to demonstrate its commitment to addressing international regulatory concerns.
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