Bermuda Reinsurance

Have you considered Bermuda? A majority of offshore captive insurance companies are located in Bermuda, as the country is accredited with the National Association of Insurance Commissioners. Thus, reinsurance companies based in Bermuda are eligible for reduced collateral requirements - typically only one ($1.00) dollar. In addition, for a Special Purpose Insurer/Reinsurance Company, there are reduced annual financial reporting requirements. Registration fees are only $525.

The charter limits the SPI/reinsurance company to insurance-linked securitizations - business, catastrophe, etc (no life), but that would seemingly fall into the category in which you seek to operate.

If Bermuda may be of interest to you, I can draft a more complete proposal and timeline for you?

Bermuda is the largest captive regime with nearly 800 total captives, though a distinction among
types of life insurance included in this total was not found in the publicly available material that was
researched. Bermuda’s captive structure is based on three different classes: General Business
Insurers, Long-Term Business Insurers and SPIs. Bermuda continues to see large numbers of
applications annually, but they are also experiencing surrendered licenses, which resulted in a net
decrease in 2016, despite an increase in new licenses. In December 2013, Bermuda won
conditional qualified jurisdiction status from the National Association of Insurance Commissioners.
As a result, reinsurers licensed and based in Bermuda are eligible to be certified for reduced
reinsurance collateral requirements. Because of this permission as well as Bermuda’s equivalence
status with Solvency II, some captive sponsors believe that their domiciliary regulator will have
increased comfort with a captive reinsurance transaction where the captive is Bermuda-based.
In 2009 Bermuda added provisions to their regulations allowing SPIs. These types of insurers must
meet the following requirements:
• The insurer is carrying on insurance business in the area of insurance-linked
securitizations
• The insurer is established to enter into a single transaction or a single set of transactions
• The insurer’s obligations are fully collateralized and
• Transactions are carried out with a limited number of sophisticated participants.
The capital requirement for an SPI is $1, since the risk is not retained within the SPI. Registration
fees are relatively low, only $525. Financial reporting requirements are more flexible, typically
allowing a range of potential methods and no specific requirement for an annual reserve opinion.