The Bermuda Monetary Authority (BMA) published Guidance Notes setting out its expectations for insurers’ recovery planning under the Insurance (Prudential Standards) (Recovery Plan) Rules 2024, including how Recovery Plans should be structured, governed, tested and integrated into enterprise risk management. The guidance positions recovery planning as an operational management tool for responding in an orderly and timely way to severe but plausible stress, aligned with relevant Financial Stability Board and International Association of Insurance Supervisors materials. Formal Recovery Plans are expected for insurers assessed as economically important or systemically significant, with the BMA using criteria including domestic business, three-year rolling average total assets of at least 10 billion, three-year rolling average gross written premiums of at least 5 billion, enhanced supervisory monitoring, and whether the BMA is the group-wide supervisor. Minimum plan content includes an executive summary, insurer description, a trigger framework (with solvency and liquidity triggers at a minimum and tiered early-warning indicators and trigger points), governance arrangements with board approval, credible and sufficiently diverse recovery options, scenario analysis (typically more severe than CISSA stresses) supported by operational testing or simulations, and a communication strategy that specifies when the BMA will be notified before and after activation. Insurers in scope will receive formal communication requiring a Recovery Plan, and proportionality may allow phased development and submission or alignment with existing tools. Where a Bermuda insurer is covered by a group Recovery Plan filed with a group-wide supervisor, it may apply to use that plan instead, subject to BMA approval and access to relevant sections, with separate entity-level planning expected where group scenarios are not sufficiently tailored. Recovery Plans are expected to be reviewed and updated at least once every three years or following material changes, with the BMA able to require more frequent updates.
Bermuda Monetary Authority 2025-04-11
Bermuda Monetary Authority issues recovery planning guidance for economically important insurers using 10 billion asset and 5 billion premium criteria
The Bermuda Monetary Authority (BMA) issued Guidance Notes for insurers' recovery planning under the Insurance (Prudential Standards) (Recovery Plan) Rules 2024, detailing structure, governance, testing, and integration into risk management. Recovery Plans are mandatory for insurers deemed economically important or systemically significant, with criteria including domestic business and asset thresholds. Plans must include governance, diverse recovery options, scenario analysis, and a communication strategy, with updates required every three years or after significant changes.