BERMUDA Law and Practice Contributed by: Ian Stone and Leo Shaw, Wakefield Quin Limited
Regulated entities are subject to additional auditor requirements. For example, insurance companies must appoint an approved auditor who meets the BMA’s criteria and must file a statutory financial return. The BMA has broad information-gathering powers under the Insurance Act 1978, which may extend to communications with a regulated entity’s auditor. 6.2 Risk Management and Internal Controls There is no specific statutory requirement under the Companies Act for the oversight of geopolitical risk, so this will be the responsibility of the board of direc - tors. For regulated entities, the BMA expects boards to maintain effective risk management frameworks that are proportionate to the nature, scale and complexity of the entity’s business. The BMA’s Insurance Code of Conduct, for example, requires insurers to have a risk management function and to consider all mate - rial risks, which may include geopolitical risk where relevant to the entity’s business. Bermuda implements international sanctions through the International Sanctions Act 2003 and the Inter - national Sanctions Regulations 2013. All persons in Bermuda (including companies and their directors) are prohibited from dealing with sanctioned persons or entities, and breach may constitute a criminal offence. Bermuda does not currently have standalone ESG reporting legislation applicable to companies general - ly. There is no mandatory requirement under the Com - panies Act for companies to report on ESG matters. For companies listed on overseas exchanges, ESG disclosure obligations will be determined by the rules of the relevant listing venue and the securities regula - tion of the applicable jurisdiction – eg, Bermuda com - panies listed on US exchanges may be subject to SEC climate-related disclosure rules as they are finalised and implemented. 7. Environmental, Social and Governance 7.1 ESG Requirements
Regulated companies should consider sector-specific codes of conduct. For example, the Insurance Code of Conduct requires companies to maintain risk man - agement frameworks that identify and manage all material risks, which includes ESG risk. 7.2 ESG Developments There is increasing interest in ESG issues in Ber - muda, and, in this respect, to date there has been no domestic political backlash of the kind observed in other parts of the world. Bermuda’s ESG govern - ance approach remains driven by international market expectations and BMA supervisory standards, rather than prescriptive domestic legislation. The most significant development is the enactment of the BEA, which came into force on 1 December 2025. This Act allows companies incorporated under the Companies Act (as well as LLCs and limited part - nerships) to opt in as benefit companies. A benefit company’s constitutional documents must contain a clearly stated public benefit, which means a posi - tive effect on society or the environment. This could include artistic, charitable, cultural, economic, edu - cational, environmental, literary, medical, religious, scientific, sporting or technological impacts. Benefit company directors may take into account the com - pany’s public benefit purpose alongside shareholder interests. It is important to note that the BEA is an opt-in frame - work. Traditional companies that do not elect for benefit company status are not affected and are not required to pursue public benefit objectives. The governance component has seen domestic legis - lative activity, including changes to the beneficial own - ership regime and the prohibition of nominee directors and enhanced transparency requirements. Privacy and data protection considerations have advanced through the full implementation of the PIPA.
8. Artificial Intelligence 8.1 Board Oversight of AI
There are no AI-specific legal or regulatory require - ments under Bermuda law relating to board oversight
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