(6)In Bermuda, the Insurance Act lays down two capital requirements for insurers other than captive insurance companies 4 : the Minimum Solvency Margin (MSM) and the Enhanced Capital Requirement (ECR), applicable to both commercial life and non-life insurers. The ECR is determined from the relevant Basic Solvency Capital Requirement (BSCR) according to a standard formula or the insurer's approved internal capital model provided that the ECR is at least equal to the insurer's MSM. The BSCR covers the following risks: credit risk, spread risk, market risk, premium risk, reserve risk, interest risk, catastrophe risk and operational risk. A Target Capital Level of 120 % of the ECR is used as an early warning solvency threshold. Qualifying capital rules differ for different categories of insurers. The Insurance Act also includes provisions on undertakings' reporting obligations regarding their solvency positions. The Bermudan Monetary Authority (BMA) is the independent regulator and supervisor. Most Bermudian insurers are obliged to prepare additional financial statements in accordance with International Financial Reporting Standards; otherwise insurers may use any generally accepted accounting principles recognised by the BMA. Insurers must publish their financial statements, which contain quantitative and qualitative information. The BMA may enter into agreements and exchange information with foreign supervisory authorities; it is a signatory to the IAIS MMoU. The BMA is bound by confidentiality law, requiring that any information regarding the business or affairs of supervised financial institutions, or regarding persons dealing with them, that is obtained by BMA staff, shall be treated as confidential.
Recital 6
- 4 The Insurance Act establishes different categories of insurers which are subject to different sets of rules. Captive insurers are one specific category of insurers, which has not been included in EIOPA's assessment and is not covered by the present act. ↩