“The BMA is now very much an expert.”
Amy Ponnampalam

Ponnampalam: Ten years ago, the life industry in Bermuda was small with simple regulation compared to what we have today. Since then, it has evolved and grown and the BMA is now very much an expert in this field.

If we look at where we are today, the BMA has significantly upskilled over the last 10 years, and now stands toe to toe in group supervisory colleges with the likes of the German, UK, and Dutch regulators.

They have the knowledge, ability and skillset in-house to govern a genuinely international life reinsurance industry.

Olunloyo: They have responded to the changing needs of the markets, which shows why it is such a strong regulator.

Bracken: They clearly have the technical expertise to make good judgements and set appropriate rules, etc.

When we have these technical discussions, I feel that there is always somebody on the other side of the table who understands clearly what you’re talking about. The distinguishing feature is their willingness to listen and to understand the insurance industry’s issues, and to work through these issues and be proactive in finding solutions.

The collateralised reinsurance vehicle mentioned earlier is a good example of a willingness to listen to the needs of the industry and work with them to develop a framework that the industry needs.

The purpose of insurance is to provide protection and confidence to those who need it. In short, the BMA does a great job.

Howell: We have to be careful not to portray them as too business-friendly, because the BMA understands that the worst thing would be for one of us to have a real crisis of solvency and they lose their equivalence. I absolutely echo what you said in terms of talking to someone who understands the issues.

It’s also nice that there is only one BMA. If you’re in the US, you have to deal with all the state-based regulators and, with all the national regulators, and it is much the same story in Europe.

In the UK, we have had discussions with the Prudential Regulation Authority where the person fully understands our issue and basically agrees with us but cannot do certain things due to European rules. Because the BMA controls its own destiny, it has more ability to create a rational outcome.

“The distinguishing feature is their willingness to listen.”
James Bracken

Kelleher: I have been affiliated with Bermuda-based companies for more than two decades and from my experience the BMA has high-quality people who are deep in the insurance business and understand the regulatory and supervisory aspects.

In fact, in a prior life when I was responsible for a life insurance group in the US—and they were participating in a supervisory college with respect to that group—they showed just as much understanding of the business and the issues as any of the other regulators at the table.

So, when they made the change to an economic balance sheet and an economic risk-based capital regime, they added to their team and now have a strong set of capabilities. Overall, I would say they could go toe to toe in terms of regulation and supervision with the best in the world at this stage.

Olunloyo: BMA is just as rigorous, just as robust, and just as demanding as the toughest regulators in the world. I guess the key difference is the fact that the regulations here are tailored specifically for reinsurance, so they reflect and support exactly what we do as an industry.

The agility and responsiveness of the BMA are second to none, so they can be both robust and dynamic at the same time and that’s what Bermuda needs if it’s going to continue to grow and move forward as a hub for reinsurance.

We are all going to be handling bigger, more complex transactions—that’s the nature of the macro environment right now. Rates are low, money is cheap and returns are hard to come by, so we have to work our capital harder to write business than we would have done in the past.

I can’t think of a regulator better placed to respond accordingly to all the innovative things that we have to do as an industry if we want to continue to grow.

Image courtesy of Shutterstock / Thomas Bethge