The Bermuda Monetary Authority has bolstered its global reputation by being among the first three insurance regulators to be approved to sign up to an international agreement for regulators to work together to improve cross-border supervision of the industry.

Along with regulators from Germany and Taiwan, the BMA was a first-round signatory to the agreement proposed by the International Association of Insurance Supervisors (IAIS).

Another 17 regulators are seeking to join the group.

The Island signed up to the IAIS Multilateral Memorandum of Understanding (MMoU) at the IAIS Triannual meeting in Taiwan yesterday. BMA chief executive officer Matthew Elderfield said it was an important step forward for the Island.

"Becoming a signatory to this MMoU is recognition of Bermuda's commitment to applying effective regulation that is compliant with international standards," Mr. Elderfield said.

"It also is a reflection of our long-standing history of cooperation with our regulatory counterparts and colleagues overseas.

"These issues are particularly significant today, given the emphasis being placed on achieving greater cooperation between financial regulators as the international scope of business conducted by insurance companies continues to grow, and integration between financial markets increases."

Political pressure is growing for increasingly international regulation of the entire financial services sector, following last year's near meltdown of the global financial system, which graphically illustrated cross-border systemic risks.

Mr. Elderfield added that such agreements also complemented the Authority's active plans to implement regulations that seek to supervise insurance groups, and its ongoing work towards achieving mutual recognition, or regulatory equivalence, for Bermuda.

The BMA has signed similar agreements with other standard setting bodies, such as the International Organisation of Securities Commissions (IOSCO) Memorandum of Understanding (MoU), and bilateral MoUs with other financial regulators, including the Financial Services Authority in the UK.

"Agreements such as the MMoU are very much in keeping with the overall trend of greater cooperation and interaction between regulators that supports issues such as group supervision," Mr. Elderfield explained.

"Within that broader context, the IAIS regards successful implementation of the MMoU as a high priority."

The IAIS, which was established in 1994, is the body that sets international standards for insurance regulation; it has 190 member jurisdictions, including Bermuda, which was a founding member.

In addition to being a first-round signatory to the MMoU, the BMA is also a member of the IAIS Signatories Working Group which reviews applications from authorities wishing to join as signatories. William Kattan, director of legal services and enforcement at the Authority, represents the BMA in this Working Group. Mr. Kattan led the efforts to become a signatory to the Memorandum.

"It is gratifying, after all the preliminary meetings and discussions that I participated in as a validator of other jurisdictions and member of the Working Group, to have reached the final stage of the process to make this MMoU a reality," Mr. Kattan said. "This project began as early as 2007 and has required significant time and deliberation from many people to ensure the result would be relevant and effective. I'm confident this MMoU will serve IAIS members well."

The MMoU provides the regulators who sign it with a formal framework for requesting and providing information about entities of mutual interest for regulatory purposes, confidentially and within strict criteria.

It covers various issues related to the supervision of insurance companies, including licensing, on going supervision and winding-up processes, as well as anti-money laundering/anti-terrorist financing matters.

It is applicable to insurance companies and intermediaries that are regulated by the signatories. By establishing the MMoU the IAIS is seeking to support its members and insurance regulators, and also facilitate enhanced cooperation and information exchange between them, as they carry out their supervisory responsibilities.