The Bermuda Monetary Authority (BMA) has responded to Ace Ltd. CEO Evan Greenberg’s call for improved regulation of the insurance industry, by saying significant progress has already been made.

In a speech on Monday, Mr. Greenberg said Bermuda had made strides forward but its regulation was still considered “middle of the pack” and it needed to become “world-class” to secure the Island’s continuing success as a global financial centre.

“We welcome Mr. Greenberg’s support for the ongoing programme of development and upgrading of insurance supervision that the BMA has been carrying forward in recent years,” a BMA statement said.

“In common with other insurance supervisors internationally, Bermuda’s supervisory approach to insurance supervision has been extensively amended, in particular to reflect the continually evolving international regulatory requirements being adopted by the global standard-setting body the International Association of Insurance Supervisors (IAIS).

“This has resulted in the Authority promoting a series of major amendments to the Insurance Act designed to provide us with the full range of powers that are now needed to ensure effective supervision.”

The statement added: “The Authority has particularly welcomed the strong support that it has received from the overwhelming majority in the industry as it carries through these major ongoing changes to Bermuda’s regulatory framework.”

The BMA highlighted several changes, either already made or in the pipeline, to enhance regulation standards.

[bul] In 2002 the Government decided to merge the insurance department of the Registrar of Companies into the BMA to ensure insurance supervision.

[bul] From 2004 through 2005, the BMA developed a set of Guidance Notes which will, by the end of this year, take the form of new codes of conduct — providing direct guidance to industry regarding how they are expected to conduct and manage their businesses from a regulatory standpoint.

[bul] In 2005 Bermuda rolled out a new “Risk Based Framework”, which includes a more enhanced off-site analysis of financial information, a composite risk rating of insurers to establish the nature and extent of regulatory oversight, and a comprehensive onsite supervisory programme.

[bul] In 2006 the Bermuda Insurance Act (1978) was amended to better clarify the role of the Insurance Advisory Committee and to ensure that the Committee’s functions were not regulatory but more focused on matters related to the development of the market.

[bul] Other amendments in 2006 resulted in legislation that enhanced standards for fitness and propriety and other regulatory requirements which strengthen the powers of the regulator.

[bul] In the first quarter of 2007 the BMA will be introducing a risk-based capital regime — a proactive addition to the framework that will be implemented ahead of global solvency standards such as the EU Solvency II and the IAIS proposed solvency standard.

[bul] The Authority has also been actively reinforcing its own resources and technical expertise, a process in which it has had the full support of Government and in particular of the Ministry of Finance.

The BMA was also invited last year to join the IAIS Technical Committee, the central standard setting committee within the organisation.

“Through this type of active involvement on a global level, the Authority is ensuring that the regulatory authorities in Bermuda are able to play their full part in the continuing international dialogue over the development of regulatory policy for the insurance sector,” the BMA added.