The Authority always seeks to act in the best interests of both current and prospective policyholders while facilitating the continued development of a viable, healthy, competitive and innovative insurance industry. The Authority has a risk-based supervisory process, which categorises regulated entities according to a number of parameters within each class of insurance.
The Authority’s supervisory regime includes scrutiny of audited statutory financial returns, and, as appropriate, meetings with senior management and on-site visits and inspections.
Actuarial certification of insurance liabilities is required annually for Class 3, 3A, 3B, Class 4 insurers and all Long-Term business, and tri-annually for Class 2 insurers. The Authority is able to concentrate its resources in those areas that most need attention, placing particular weight on the early identification of areas of non-compliance and possible emerging problems.
The Authority is a charter member of the International Association of Insurance Supervisors (“IAIS”) and continues to be closely involved with that body in the development of guidelines for global insurance regulation.
The Authority has a risk-based supervisory process, which categorises regulated entities according to a number of parameters within each class of insurance.
The Authority’s general approach involves the application of more rigorous scrutiny and more onerous requirements where material amounts of business are transacted with unrelated parties. In addition, there can be a greater reliance on transparency and ongoing disclosure where counterparties are sufficiently expert and sophisticated to be reasonably expected to understand and judge the underlying risks, and to determine their degree of tolerance for them.
In developing its regime, the Authority seeks foremost to act in the best interests of policyholders and prospective policyholders while facilitating the continued development of a viable, healthy, competitive and innovative insurance industry. This approach has been applied to reinsurance business and captive business in Bermuda for over 20 years. During that period, the Authority has also been assisted in implementing supervision that is both appropriate and effective by the existence of a mature financial market infrastructure, and it has been able to tailor its supervisory approach accordingly.
Companies are required to provide to the Authority annual statements audited by an approved auditor. The auditor is required to express an opinion on the reasonableness of the statements in an insurer’s Solvency Certificate and on whether the statutory ratios comply with the requirements of the Act and Regulations.
In addition to the extensive on-site work conducted by approved auditors and actuaries, Authority staff carry out detailed on-site reviews, coupled with comprehensive off-site analysis.
Click here for additional information on Solvency II.