Jan 2026
We are only a few weeks into the start of 2026 and already there are new and important updates relevant to certain stakeholders operating in Bermuda’s insurance and reinsurance industry. In particular, we wish to highlight the new changes which now apply to those who are registered as Class C, D or E insurers, and to those who form or may form part of an insurance group.
Class C, D and E Prudential Rule Amendments
The Insurance (Prudential Standards) (Class C, D and E Solvency Requirement) Amendment Rules 2025 became operative on 1 January 2026 and amended the Insurance (Prudential Standards) (Class C, Class D and Class E Solvency Requirement) Rules 2011 (the “Rules”) to require that all Class C, D and E insurers (other than those carrying on domestic business) prepare and file an asset and liability statement as part of the applicable year-end filing period. The relevant statement should be signed by the insurer’s chief executive officer and a senior executive responsible for the actuarial, investment management, risk management, internal audit or compliance function. Copies of such statements must be kept at each insurer’s principal office for a period of at least five years beginning with its filing date.
Group Supervision
The Insurance Amendment (No. 2) Act 2025 came into effect on 7 January 2026. This amendment act updated the Insurance Act 1978 (the “Act”) in a number of ways which primarily impact entities that form part of a Bermuda-based insurance group and/or have a Bermuda based insurance group holding entity. The key changes are as follows:
1. New Application of Group Supervision
Under the amended Act, the Bermuda Monetary Authority (BMA) will now apply group supervision over an insurance group which is headed by either (a) a specified insurer or (b) a body corporate existing in Bermuda which is the ultimate parent company of an insurance group. For this purpose, a “specified insurer” shall be a Class 3A, 3B, 4, C, D or E insurer unless such other class of insurer is designated by the BMA.
Where the ultimate holding entity is not a body corporate, such as a limited partnership, the amended Act provides that the BMA may still determine whether it is appropriate for it to be group supervisor of that insurance group. Note that upon making such determination, prior notice of such decision will be provided to that group, and the group will be provided with an opportunity to submit written responses related thereto.
2. New Regulation of Insurance Holding Companies
As previously, the BMA will initially effect group supervision via a Bermuda registered insurer which shall be referred to as the “designated insurer”. However, the amended Act now also introduces an ability for the BMA to transition group supervision to a non-regulated insurance holding company within the group. More specifically, should the BMA determine that the effective supervision of the insurance group requires regulation at the insurance holding company level, the BMA may now designate and register either:
- the ultimate parent company incorporated in Bermuda;
- an intermediate holding company incorporated in Bermuda;
- a specified insurer that heads an insurance group; or
- the head of an internationally active insurance group, as a “designated insurance holding company”.
Notice of this determination will be given, following which such entity will be registered by the BMA. Upon registration, the BMA will be able to extend its powers of supervision and enforcement over such designated insurance holding company as they apply to the Bermuda registered insurers. Ultimately, this means that the BMA will, among other things, be able to extend powers to obtain information and reports and require the production of documents and communication with the BMA at the holding company level. It will also extend the application of certain material change provisions over the designated insurance holding company along with its powers of intervention, and ability to impose directions, penalties and prohibition orders over such entities.
3. Changes to Material Change Provisions
In addition to the changes noted above, all existing insurance groups should note that from 7 January 2026:
(a) no member of an insurance group domiciled in Bermuda (where registered as an insurer or not) shall amalgamate with, acquire or merge with another firm without the designated insurer of that group first providing notice to the BMA that the member thereof intends to effect such material change and allowing the BMA at least 30 days to confirm that it has no objection or allowing that period to elapse without the BMA having requested any further information or serving any written notice of objection to the change; and
(b) designated insurers of an insurance group must continue to notify the BMA within 30 days of any member of the group (in Bermuda or elsewhere) making any of the following material changes:
- engaging in unrelated business that is retail business;
- acquiring a controlling interest in an undertaking that is engaged in non-insurance business which offers services and products to persons who are not affiliates of the insurer;
- outsourcing all or substantially all of the functions of actuarial, risk management, compliance or internal audit, transferring other than by way of reinsurance all or substantially all of a line of business;
- expanding into a material new line of business; or
- selling an insurer.
In addition to the above, the BMA has also made consequential amendments to ensure the remainder of the primary legislation appropriately extends to this new regime of group supervision.
Any insurers or members of an insurance group that may meet this new criteria or have any questions over the application of these amendments should reach out to their Conyers contact to discuss.