The Bermuda Monetary Authority (BMA) announced plans to publish a consultation paper in the fourth quarter of 2025 on a new Special Purpose Insurer (SPI) framework tailored for parametric products, building on Bermuda’s existing SPI regime used in the insurance-linked securities market. The BMA linked the initiative to widening protection gaps as natural catastrophe risks change in nature, scale and frequency due to climate factors and as non-insured losses grow, alongside emerging risks beyond natural catastrophes such as cyber threats. It indicated that a fit-for-purpose regulatory framework for parametric insurance covers is intended to support a more robust parametric market, with potential benefits for policyholders including faster claims and payout processes compared with traditional indemnity insurance. The next step is the issuance of the consultation paper in Q4 2025.
Bermuda Monetary Authority 2025-10-29
Bermuda Monetary Authority to issue Q4 2025 consultation on a new Special Purpose Insurer framework for parametric products
The Bermuda Monetary Authority plans to consult in the fourth quarter of 2025 on a new Special Purpose Insurer framework tailored for parametric products, building on Bermuda’s existing regime used in the insurance-linked securities market. The initiative responds to widening protection gaps from evolving natural catastrophe and emerging risks such as cyber, and aims to create a regulatory framework to support a more robust parametric market with faster claims and payouts than traditional indemnity insurance.