NAIC Places Bermuda on Reciprocal Jurisdiction List

Bermuda flag with ragged edges

December 16, 2019 |

Bermuda flag with ragged edges

Three international regulatory authorities were approved by the National Association of Insurance Commissioners (NAIC) as reciprocal jurisdictions. Under the NAIC's Process for Evaluating Qualified and Reciprocal Jurisdictions, the Bermuda Monetary Authority, Japanese Financial Services Agency, and Swiss Financial Market Supervisory Authority will be placed on the NAIC List of Reciprocal Jurisdictions effective January 1, 2020.

"The NAIC has a successful history of working with Bermuda, Japan, and Switzerland as qualified jurisdictions," said Eric A. Cioppa, NAIC president and Maine insurance superintendent. "As US ceding insurers and state regulators have a large degree of confidence in their supervision of reinsurers, they should receive similar treatment to reinsurers domiciled in covered agreement jurisdictions."

Originally adopted by the NAIC in 2013 to address qualified jurisdictions, the process was amended in 2019 to recognize qualified jurisdictions meeting certain additional requirements consistent with the terms of the covered agreements with the European Union and United Kingdom.

EU-member countries that are subject to an in-force covered agreement eliminating reinsurance collateral requirements with US ceding insurers are automatically included on the NAIC List of Reciprocal Jurisdictions, as well as US jurisdictions meeting requirements for accreditation under the NAIC Financial Standards and Accreditation Program.

The NAIC approved revisions to the Credit for Reinsurance Model Law (#785) and Credit for Reinsurance Model Regulation (#786) in June to make the models consistent with the covered agreements with respect to reinsurance collateral requirements.

States must comply with the provisions in the covered agreement within 5 years of the signing of the agreement with the European Union or face potential preemption by the Federal Insurance Office. The agreement was signed on September 22, 2017.

December 16, 2019