special purpose insurer

Recent changes made by the Bermuda Monetary Authority (BMA) to improve processes specific for catastrophe and mortgage bonds, shows that the island is listening to its clients and being more adaptive in the face of growing competition, according to Brad Adderley, Partner at global law firm Appleby.

Catastrophe bond sponsors looking to locate their issuance structures in Bermuda can now benefit from much faster licensing and registration of new cat bond vehicles, with the process streamlined to take just three working days by the regulator.

Data from the Bermuda Monetary Authority (BMA) reveals that the total assets of special purpose insurers (SPI’s) licensed in the region increased to roughly $34.34 billion as at December 31st 2015, while capital & surplus also increased when compared with the previous year, to approximately $4.5 billion.

Guernsey has updated its insurance-linked securities (ILS) rules in order to clarify the regulatory treatment of collateralised reinsurance transactions, add a full-featured SPI structure that can support catastrophe bonds and sidecars, and to speed up the approval to a one-day process.

Guernsey is seeking to build on its insurance-linked securities (ILS) and collateralised reinsurance activity by adding legislation to allow for special purpose insurance (SPI) vehicles, which could be catastrophe bond issuers, for the end of 2016.

For the first two months of 2015 insurance and reinsurance company registrations in Bermuda have been dominated by insurance-linked securities (ILS) focused vehicles and hedge fund reinsurance operations.

After a bumper year of new Special Purpose Insurers (SPI) in 2013 saw 51 of the, largely ILS or collateralized reinsurance focused, vehicles registered, the 2014 annual total came in some way below with 28 new SPI’s.

According to the latest information from the Bermuda Monetary Authority (BMA) registrations of insurance and reinsurance entities on the island increase during the first-half of 2014, compared to a year earlier.

Registrations of Bermuda special purpose insurance (SPI) vehicles in 2014 number 14 by the end of May, dropping slightly behind the run rate seen in 2013. However, overall insurance registrations for the year to date are 38, which outpaces 2013.

New registrations of Special Purpose Insurers (SPI) drove the number of newly registered insurers in Bermuda to 91 in total for the year 2013, with 51 of those SPI’s, according to annual statistics from the Bermuda Monetary Authority (BMA).