Bermuda’s insurance regulator is increasing staffing by as much as 50 percent as it sets its sights on eventually reaching a mutual recognition agreement with other domiciles, executives at an insurance conference said Monday.
“The (Bermuda Monetary Authority) is working towards mutual recognition, and beefing up its human resources,” said Wilhelm Zeller, Chief Executive of Hannover Re , at a Standard & Poor’s insurance conference in New York.
Mutual recognition could be a boon for insurers and reinsurers because it could reduce the red tape that now exists as companies have to comply with regulatory rules in multiple jurisdictions where they operate.
Under such an agreement, an insurer could be considered acceptably regulated by the “home” regulator, and not necessarily subjected to additional regulation.
Zeller was in Bermuda, a leading offshore insurance and reinsurance center, last week meeting with other industry executives and regulators, including the Bermuda Monetary Authority (BMA), the island’s financial services regulator.
He said the BMA plans to add about 60 employees, bringing the number of staffers up to 180.
A Bermuda Monetary Authority spokeswoman said it is adding staff, amid some major policy developments, chiefly mutual recognition. By year end, the BMA expects its headcount to grow to 145, she added.
Bermuda-based insurers and reinsurers have combined capital exceeding $100 billion, and the island rates as the fourth-largest reinsurance market in the world, according to Standard & Poor’s.
Reinsurers sell policies to insurers to spread the risk of loss contained in policies bought by corporations and individuals.
Zeller said Hannover moved its life reinsurance business to Bermuda from Dublin last year, citing better access to actuarial talent, among other factors. Bermuda has attracted business because of its lighter regulatory regime, and no corporate or income tax.
Zeller added that the change could increase the amount of regulation that Bermuda-based insurers may have to deal with.
Bermuda’s insurance regulator has been preparing for mutual recognition over the last several years so it can be ready when the International Association of Insurance Supervisors finalizes a blueprint for the change, including a standard capital adequacy model.
Neill Currie, chief executive of RenaissanceRe Holdings Ltd , a Bermuda-based reinsurer, said the BMA is adding staff as its responsibilities expand.
“It (the BMA) stacks up very nicely with regulators around the world, but not because they were behind other regimes, but because the number of (companies) and complexity has gone up.”
Bermuda’s insurance market has grown rapidly over the last five decades from a captive reinsurance, or self-reinsurance, market to one that is now home to dozens of large, publicly listed companies.
“We will continue to be based in Bermuda; for us it is just right,” said Currie, adding that for start-up companies Bermuda can be more difficult, given space and hiring limitations.
Bermuda, a 24-square-mile mid-Atlantic British colony, is hampered by its small size, which makes it difficult to hire a large work force.
The island’s insurance market has been given a run for its money in recent years by emerging offshore centers such as Dubai and Dublin.
“We look at other places from time to time, but we do not see any other place that is better,” said Ray Barrette, Chief Executive of White Mountains Insurance Group Ltd . “It is getting tougher and tougher for new companies, so I assume there will be pressure to go other places, but we are there to stay,” he added.
(Editing by Gerald E. McCormick, Gary Hill)
Was this article valuable?
Here are more articles you may enjoy.