Bermuda has won a coveted financial gold star from the European Union.

The Island has been awarded full equivalence under the tough EU Solvency II regulations by the European Commission after six years of work.

The move means Bermuda and Switzerland are the only non-EU jurisdictions to be recognised as in line with new Euro insurance rules.

There is still a 90-day consultation period for EU member countries and the European Parliament to have their say.

Bermuda Monetary Authority (BMA) chief executive Jeremy Cox, who spearheaded the drive to attain EU equivalency, said: “This is significant news for Bermuda and the Island’s future as a strong financial services centre.

“It’s an exciting time for us. The world is watching to see how Europe will transform its risk industry and improve the protection of its policyholders.

“The world will also be watching to see how Bermuda plays its part in this epic transformation.

“It has been a long journey and an incredible amount of work has gone into this over the past six years. At the Authority, we are delighted that it is now on the brink of successful completion.”

Mr Cox added: “The Authority has always performed the role of gatekeeper to a very high standard. But this achievement marks not only our supervisory expertise, but also our ability to stay focused and keep our eye on the long-term prize.

“There is now no doubt as to the calibre of commercial reinsurers and insurers operating from Bermuda or the quality of their regulatory environment.”

The news means that Bermuda commercial reinsurers and insurers will be able to compete on an equal footing in Europe in writing business.

Bermuda had to meet rules regulating the amount of capital that EU insurers must hold to reduce the risk of insolvency.

Bradley Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers (Abir), said: “Solvency II equivalence for Bermuda will ensure competitive markets and better prices for European businesses and consumers.

“Abir members provide significant amounts of reinsurance capacity to European-based insurers.

“Bermuda companies provided 20 per cent of the recent UK Pool Re terrorism reinsurance placement and historically have supplied 20 per cent of the European property catastrophe reinsurance market.

“In addition, Bermuda insurers have covered between 20 per cent and 50 per cent of recent European-based airline and ocean marine catastrophic losses.”

Jo Willaert, president of the Federation of European Risk Management Associations (FERMA) in Brussels, said: “It is of great importance that European industrial and financial business entities have continued access to important commercial insurance and reinsurance capacity from Bermuda commercial insurers and reinsurers.”

He added: “FERMA has been determined to ensure that the coverage of risks for large European corporations remains available and affordable in order to protect the competitiveness of European industries.

“It also protects their resilience in the event of catastrophic losses as large claims payments are made into the EU economy.

“The protection of European businesses will be strengthened by the equivalence decision from the European Commission.”

Bermuda will be officially in line with EU standards from the start of next year, although there is a 90-day consultation period with the European Council and European Parliament.

David Matcham, chief executive officer of the International Underwriting Association in London, said: “The Bermudian reinsurance market is an important source of diversification in reinsurance capacity for the international insurance market and for European insurers.

“Bermudian equivalence will ensure market access and be helpful for EU consumers. We’d encourage the Commission and Council to expedite their comments, if any, on the delegated act so equivalence can move ahead.”

Hugh Savill, director of regulation at the Association of British Insurers, added: “Given the close and mutually beneficial relationship between the London market and Bermuda, the publication by the European Commission of its proposals on Solvency II equivalence for Bermuda is really good news. [The year] 2016 is nearly upon us so we hope to see these proposals promptly adopted.”

Robert Paton, president of the Bermuda Insurance Management Association, added: “The Bermuda Insurance Management Association applauds the BMA’s vision, leadership and tenacity in achieving a bifurcated risk based, pragmatic regulatory regime appropriate for both the Bermuda commercial and limited purpose insurer markets.”

Wendy Outerbridge, corporate secretary of the Bermuda International Long Term Insurers and Reinsurers Association (BILTIR), said: “BILTIR congratulates the Bermuda Monetary Authority on obtaining equivalence with the European Union’s Solvency II prudential regulation regime.

“Equivalency is a significant achievement for Bermuda which will allow its insurance industry to compete more effectively in the global marketplace.

“The BMA has demonstrated its dedication and commitment to the industry in achieving this goal.

“BILTIR has been pleased to work with the BMA on this initiative over the past several years, and we are excited about the future opportunities this will bring to Bermuda.”

Bermuda Business Development Agency chief executive officer Ross Webber, added: “It represents an appropriate endorsement that should reap benefits not only for Bermuda’s risk industry, but for every sector of our global market whose success depends on Bermuda’s blue-chip reputation.”