The Bermuda Monetary Authority recently published an updated Guidance Note [GN] for general business insurers that utilise Segregated Accounts and Separate Accounts [SAC], collectively known as SAC insurers.
A spokesperson said, “The GN followed extensive market consultation and aims to ensure that SAC insurers function prudently within a robust and effective regulatory framework. The GN provides guidance on licensing, waivers and modifications, governance expectations, risk management practices and reporting requirements. The requirements will come into effect on 1 January 2027.
“In recent years, the Bermuda SAC market has expanded beyond the standard rent-a-captive market. In response, the BMA has implemented practices and guidance to support prudent operations with the continuous aim of safeguarding policyholder protection. This update further advances that approach, reflecting the current use and application of SAC structures.”
Gerald Gakundi, Deputy Managing Director, Head of Insurance and Investment Funds, said, “The Authority is committed to ensuring that Bermuda’s SAC regulatory regime continues to inspire confidence among key stakeholders. Both current and prospective SAC insurers will benefit from this information, particularly as it helps them deliver critical risk-transfer solutions that benefit policyholders worldwide.
“The BMA also recognises the need for clarity on the scope and implementation of the provisions within the guidance to ensure our stakeholders have a sound understanding of the regulatory regime for SAC insurers in Bermuda. Further, the Authority is pleased to confirm that its regulatory reporting framework remains robust and responsive to an evolving market. Rather than increasing the number of annual reporting forms, the Authority has introduced Agreed Upon Procedures [AUPs] over the schedule of segregated accounts, which has been in place since 2018. This targeted approach enhances transparency and data capabilities while maintaining an efficient and pragmatic reporting process.”
A spokesperson added, “Today, SAC insurers in Bermuda operate across a wide spectrum of property and casualty sectors, including captive insurance, Insurance-Linked Securities [ILS] and innovative insurance. Bermuda SAC insurers have demonstrated resilience throughout market cycles and have continued to deliver efficient solutions to clients globally. New SAC formations are steadily increasing, underscoring the timeliness and importance of this GN and its relevance to ongoing market developments. Market participants with questions about this GN are encouraged to contact their respective supervisory teams.”
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