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Bermuda's re/insurance industry has displayed remarkable agility while adapting in response to the COVID-19 pandemic. Leading insurers and reinsurers remain open for business, and continue to meet global clients' needs. Resilience in the face of disruption is not a surprise – Bermuda's re/insurance industry has a proven track record of managing risk and successfully navigating critical moments during natural and man-made disasters.
Bermuda's re/insurance industry's resilience in light of COVID-19 rests on the backdrop of recent developments solidifying the jurisdiction's position as a world leading re/insurance hub. In late 2019, the National Association of Insurance Commissioners endorsed Bermuda with its hard earned Reciprocal Jurisdiction Status. This distinction, giving Bermuda's global re/insurance market a competitive edge against other international markets, was highly celebrated. Earlier this year, Bermuda was recognised by the Caribbean Financial Action Task Force as a global leader in the fight against financial crime. Shortly after, the Economic and Financial Affairs Council announced that Bermuda has moved to the "whitelist" following efforts to enhance its regulatory framework and compliance with the EU's tax governance principles. Each of these endorsements serve as a testament to Bermuda's place at the forefront of the global re/insurance market.
In addition to these exciting achievements, Bermuda's commitment to providing innovative solutions in the dynamic insurance marketplace was recently reconfirmed. In 2019, amendments to Bermuda's Insurance Act introduced two new classes of Limited Purpose Insurers: a fully collateralised reinsurer class (Collateralised Insurers) and an innovation class (Class IIGB), in addition to a new category of insurance intermediary. The amendments were made with a view to facilitating innovation and growth, and cement Bermuda's position as a world-leading re/insurance market. The Bermuda Monetary Authority (BMA) illustrated its commitment to promote innovation in the insurance industry by launching the Insurance Regulatory Sandbox (Sandbox) targeted at insurance technology companies looking to test financial technology to a limited number of clients, for a limited time period, in a controlled environment.
Appleby's specialist Insurance & Reinsurance team have developed strong partnerships with re/insurance companies seeking commercially focused advice. Our team regularly advises on the establishment, regulatory compliance and business operations of all forms of insurance vehicles. Our expertise includes advising Special Purpose Insurers, formed as issue vehicles for Insurance-Linked Securities, including collateralised reinsurance and industry loss warranties. Our lawyers have extensive first-hand experience in a wide array of insurance related matters, including mergers and acquisitions, capital raising and alternative risk transfer structures.
Relying on our team's vast experience and knowledge base, Appleby remains heavily involved in market activity, advising clients on unique and significant matters. Our lawyers have been at the forefront of the introduction of the new Collateralised Insurer class, acting as counsel on one of the first transactions involving this new vehicle. We recently acted as Bermuda counsel to a leading US-focused retirement, life insurance and reinsurance company, with its successful and exciting launch of a co-investment vehicle for both reinsurance of life & annuity blocks and reinsurance of pension risk transfer transactions. Our team is thrilled to be working with innovative insurers who provide bespoke insurance solutions to emerging business sectors, such as digital asset (cryptocurrency) enterprises and cannabis and hemp related businesses. In a first of its kind transaction, our team acted as Bermuda counsel to the first company to be licensed to operate in the Sandbox on completion of a parametric cyber risk instrument trade. In the M&A space, Appleby recently advised on a transaction involving an important life reinsurance structure, helping to grow the life market in Bermuda. These deals represent a brief cross-section of Appleby's capabilities and capacity to advise clients in the dynamic and ever-changing global re/insurance industry.
Originally published 24 April, 2020
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