ARTICLE · 20 JUNE 2008

Bermuda´s New Solvency Capital Requirements

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Bermuda is shortly to introduce new risk-based capital standards for insurance companies. The purpose of the Bermuda Solvency Capital Requirement ("BSCR") is to allow the Bermuda Monetary Authority ("BMA") to analyse the impact and probability of failures among regulated insurers.

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Bermuda is shortly to introduce new risk-based capital standards for insurance companies. The purpose of the Bermuda Solvency Capital Requirement ("BSCR") is to allow the Bermuda Monetary Authority ("BMA") to analyse the impact and probability of failures among regulated insurers. The BSCR is being implemented in phases, first among the Class 4 insurers, and subsequently among certain commercial Class 3 insurers.

Generally, the Insurance Act 1978 and its Regulations require insurers and reinsurers to meet a margin of solvency, as well as minimum amounts of paid-up capital for registration. This is the Regulatory Capital Requirement ("RCR").

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