The National Association of Insurance Commissioners (NAIC) announced today that Bermuda has been granted Reciprocal Jurisdiction status effective 1 January 2020. Additionally, the NAIC has completed its five-year re-evaluation of Bermuda and it has approved Bermuda as a Qualified Jurisdiction.
The NAIC is the US standard-setting and regulatory support organisation created and governed by the country’s chief insurance regulators from the 50 US States, the District of Columbia and five US territories.
Effective 1 January 2015, Bermuda was placed on the NAIC’s first List of Qualified Jurisdictions, alongside France, Germany, Ireland, Japan, Switzerland and the United Kingdom. Since 2015, Bermuda has maintained its status on the list. The renewed Qualified Jurisdiction status maintains Bermuda-domiciled (re)insurer eligibility for reduced (re)insurance collateral requirements under the NAIC’s Credit for Reinsurance Model Law and Regulations. Bermuda’s Qualified Jurisdiction status is applicable to (re)insurers licenced as Class 3A, Class 3B and Class 4, and Long-Term insurers of Class C, Class D and Class E. To be re-approved as a Qualified Jurisdiction, the BMA was required to maintain a regime that meets the standards of and achieves similar supervisory outcomes of the US regulatory system for (re)insurers.
The Qualified Jurisdiction status has solidified Bermuda’s well-established relevance to the United States as a major (re)insurance trading partner. Over the last two decades, Bermuda insurers and (re)insurers have paid in excess of $200 billion to settle US losses, consistently offering valuable capacity provisioning for catastrophic events. As one of only seven jurisdictions with the Qualified Jurisdiction status, 23 of the 32 certified (re)insurers are Bermudian. These (re)insurers’ ability to passport into 39 states further underscores the Bermuda market’s relevance to the United States. Renewal of Bermuda’s status as a Qualified Jurisdiction will allow continued efficiencies in the cross-border operations of Bermuda (re)insurers in the US insurance market.