The Bermuda Monetary Authority has published its response to feedback on proposed changes to the Insurance Code of Conduct and Insurance (Group Supervision) Rules 2011, supported by instructions and guidance on how the Prudent Person Principle should be applied by Bermuda-regulated commercial insurers in classes 3A, 3B, 4, C, D and E and by insurance groups for which it is group supervisor. The response confirms that the principle will continue to be applied proportionately and on a case-by-case basis, without a separate framework for long-term and property and casualty insurers, while sharpening expectations around governance and risk management for illiquid, structured and other complex assets. Group-level governance may support oversight, but legal entity boards must still show that centralised policies and functions reflect the insurer’s own business and that effective control remains with the board. Portfolio or fund-level assessment remains relevant, yet firms are expected to understand risks in underlying assets through a look-through approach. GAAP valuation procedures can form part of the valuation framework, but reliance on GAAP alone will not demonstrate compliance with the Prudent Person Principle because management and boards remain responsible for valuations and for addressing all elements of the principle. After reviewing stakeholder responses, the Authority said it had amended the proposals where appropriate. It proposes that the Code amendments take effect on issuance, with in-scope insurers required to comply by 31 December 2026.
Bermuda Monetary Authority2026-06-09
Bermuda Monetary Authority amends prudent person principle proposals after consultation and gives insurers until 31 December 2026 to comply
The Bermuda Monetary Authority has published a feedback statement on changes to the Insurance Code of Conduct and Insurance (Group Supervision) Rules 2011, clarifying expectations for application of the Prudent Person Principle by specified commercial insurers and insurance groups. The Authority confirms a proportionate, case-by-case approach without separate frameworks for long-term and property and casualty insurers, while tightening expectations on governance, risk management, look-through assessment of complex assets and valuation responsibilities. The Code amendments will take effect on issuance, with in-scope insurers required to comply by 31 December 2026.