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, positioning recovery planning as an embedded management process to restore financial strength and viability under severe stress. Formal Recovery Plans will be required for insurers the BMA assesses as economically important or systemically significant, with indicative criteria including domestic business, a three-year rolling average of at least USD 10 billion in total assets or USD 5 billion in total gross written premiums, enhanced supervisory monitoring, or where the BMA is the group-wide supervisor. Proportionality may apply to both development and maintenance, including phased submission, alignment with existing enterprise risk management tools, or targeted recovery-planning measures without compiling a formal plan; insurers included in a group-wide supervisor’s plan may apply to adopt that plan, subject to BMA approval and access rights. The Guidance Notes also set minimum plan components, including solvency and liquidity triggers, governance and escalation, credible recovery options with feasibility and impact analysis, scenario analysis and operational testing, and a communications plan that specifies when the BMA will be notified. The board is expected to approve the Recovery Plan, which should be reviewed and updated at least once every three years or following material changes, with the BMA able to require more frequent updates. Insurers within scope will receive formal communication requiring a plan, and notifications to the BMA are expected in anticipation of likely trigger breaches, immediately upon breach, on activation, periodically during implementation, and on exit from the recovery zone.

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