BERMUDA Law and Practice Contributed by: Brad Adderley, Matthew Carr, Max Tetlow, Cathryn Minors, Josephine Noddings, Aleisha Hollis, Melinda Mayne, Milaun Perott and Mya Gibbons, Appleby
• a person who holds 10% or more of the shares carrying rights to vote at a shareholders’ meeting of the registered insurer or its parent company; • a person who is entitled to exercise 10% or more of the voting power at any shareholders’ meeting of such registered insurer or its parent company; or • a person who is able to exercise significant influ- ence over the management of the registered insurer or its parent company by virtue of its share- holding or its entitlement to exercise, or control the exercise of, its voting power at any shareholders’ meeting. A material change to an insurers’ business and opera- tions must receive the prior “no objection” of the BMA in the event that any one of the following occurs: • the acquisition or transfer of insurance business being part of a scheme falling within, or any trans- action relating to a scheme of arrangement under, Section 25 of the Insurance Act or Section 99 of the Companies Act; • an amalgamation with or acquisition of another firm; • engagement in unrelated business that is retail business; • the acquisition of a controlling interest in an under- taking that is engaged in non-insurance business that offers services and products to persons who are not affiliates of the insurer; • outsourcing of all or substantially all of an insurer’s actuarial, risk management, compliance or internal audit functions; • outsourcing of all or a material part of an insurer’s underwriting activity; • the transfer, other than by way of reinsurance, of all or substantially all of a line of business; • the expansion into a material new line of business; • the sale of an insurer; and • the outsourcing of an officer role. In considering whether to provide “no objection” the BMA will, among other things, assess the fitness and propriety of a proposed controller, and the financial strength of the insurance company and its ability to continue to meet its capital and solvency margins fol- lowing the transaction.
Changes to the direct or ultimate beneficial owner- ship may also give rise to filing requirements under the Beneficial Ownership Act 2025 and related regula- tions, which are made via the Registrar of Companies’ filing portal. Closed Block Business In Bermuda’s insurance landscape, closed block transactions play a pivotal role, particularly in long- term reinsurance. The BMA exercises meticulous oversight of these transactions, guided by a risk- based and proportional supervisory framework. Each transaction is subject to prior BMA approval, with the review process tailored to its unique attributes. In scope closed block transactions will include: (i) those covering future premiums and in-force business (ii) asset intensive transactions (eg, pension risk transfer) and (iii) fixed annuities, fixed index annuities, variable annuities and whole-life policies. The complexity, size, and risk profile impact of a transaction directly influence the depth of regulatory scrutiny. This individualised approach ensures thor- ough regulatory engagement, aligned with the specific demands of each transaction. The BMA’s method not only underscores the importance of these transac- tions in the insurance market but also reinforces the commitment to maintaining a robust and responsive regulatory environment. This approach has significant implications for insurers, affecting their risk manage- ment, capital requirements and compliance strategies. Related Party Transactions The BMA requires prior approval for all assets and investments involving counterparty credit exposure to affiliated, related or connected parties. This over- sight is part of the BMA’s proactive and robust regula- tory approach, aligned with international standards to ensure market integrity and policyholder protection. The BMA’s vigilant monitoring of these transactions emphasises transparency and accountability, employ- ing advanced analytical tools and comprehensive reporting mechanisms. This not only aligns with global regulatory practices but also positively influences the stability and reliability of Bermuda’s insurance sector, enhancing its international reputation and trust among stakeholders.
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