Bermuda, the world's leading domicile for captive insurers, willnot apply Solvency II equivalency to the captive businessesdomiciled there, announced the Bermuda Monetary Authority (BMA) onTuesday.  

Solvency II requirements would require captives to conform torules about capital levels that must be maintained by insurancebusinesses within the European Union.

"We can definitively state that Bermuda will not apply anySolvency II-type regime to the captive sector," says Jeremy Cox,chief executive officer at the BMA. "We will introduce a riskreturn as part of consolidated annual filing for captives that theywill submit electronically, which will create efficiencies in theprocess for both the market and the Authority."  

He continues, "It's good for Bermuda and the market that we canmake this decision based on the proven appropriateness of ourregime for captives. This step, as well as the changes to ourframework for the commercial sector, reflects our ability to takeindependent decisions on regulatory change at a pace that's rightfor Bermuda and according to what makes sense for our diversemarket, while taking into account achieving global recognition forour supervisory regimes."

Cox says the BMA would still contribute to internationaldevelopments in insurance-industry regulation and maintain strongties to key regulators abroad while emphasizing the independence ofthe Bermuda market.

"There are companies here that have a global footprint," saysCox.

Bermuda does business with about 1,200 international insurersand reinsurers and maintains about 900 captive insurance companieswithin the domicile, according to the Bermuda Insurance Market.