The Bermuda Monetary Authority (BMA) has published updated guidance for general business insurers using segregated or separate accounts, setting expectations for funding, governance and reporting at the individual cell level. It applies to limited purpose and commercial insurers for financial years beginning on or after 1 January 2027, excluding long-term insurers and incorporated segregated account structures covered by separate guidance. The update reflects the market’s expansion beyond traditional captive arrangements into broader property and casualty business. Each cell must meet applicable solvency requirements independently and maintain capital and liquidity adequate for its risks, rather than base underwriting, reserving or distributions on the insurer’s consolidated capital position. Funding must be demonstrable and reliable, with clear contractual commitments for additional contributions. Speculative or low-quality collateral and limited recourse clauses cannot substitute for actual funding. Fully collateralised business must have collateral contributed by the insurance contract’s effective date. Boards retain responsibility for governance, risk management and outsourced activities, including services provided by cell participants. Capital reductions exceeding 15% within an individual cell require notification within 14 days if they do not trigger the statutory requirement for prior approval at insurer level. Reporting changes centre on Agreed Upon Procedures over the existing Schedule of Segregated Accounts, rather than additional annual reporting forms. These complement the auditor procedures published in September, which prescribe annual reconciliation and segregation checks alongside specified reviews on a rolling five-year cycle. The schedule itself remains outside the statutory audit’s scope. Principal representatives must annually attest to its accuracy and collateral adequacy, and remediation plans for cells in deficit should be provided to auditors. The BMA will consider applications for transitional arrangements during the first year of implementation.
Bermuda Monetary Authority updates guidance on cell funding, governance and reporting for general business insurers from 2027
The Bermuda Monetary Authority has updated guidance for general business insurers using segregated or separate accounts, applicable to financial years beginning on or after 1 January 2027. Each cell must independently meet solvency requirements and hold reliable funding, while boards retain responsibility for governance and outsourced activities. Reporting builds on the existing segregated accounts schedule through Agreed Upon Procedures and an annual principal representative attestation, rather than additional annual forms.