Britain’s imminent departure from the European Union should not impact Bermuda’s ability to successfully negotiate with the EU on matters of regulation and securing fair access to the EU market for the island’s insurance and financial services sector.

That is the view of Jeremy Cox, chief executive officer of the Bermuda Monetary Authority.

A year ago, Bermuda achieved Solvency II equivalence, with the EU recognising that the island’s insurance regulation is at the same level as the EU’s new and enhanced insurance rules.

It was the culmination of many years of effort and negotiation, led by the BMA, to ensure that commercial insurers and reinsurers based in Bermuda are not competitively disadvantaged when they do business in the EU.

Mr Cox said that while Britain was not insignificant in the process of Bermuda gaining Solvency II equivalence, it was primarily Bermuda that negotiated the arrangements.

Last month, Britain triggered a two-year process to leave the 28-nation EU. Mr Cox is confident that even when Britain no longer has a presence in the bloc’s decision-making mechanism, Bermuda will continue its negotiating and relationship channels with the EU.

“We have never had questions about our linkage to the UK. People have always treated us as a third country, independently seeking to get equivalence,” said Mr Cox.

“I don’t want to say that the UK were insignificant in the process. Every trip that I made to the UK, I always made a point of touching base with the Foreign and Commonwealth Office, and with Treasury, to give them an update on what we were doing and our progress, to pick their brain, to see if there was any intelligence they were gathering to suggest that we were not on the right track. So it was a useful process.

“But I believe the efforts of the BMA, the Bermuda Government, and certainly the significant efforts of organisations like Abir, won equivalence for Bermuda as opposed to anything else. They had to trust us.

“All along the way it was the face of Bermuda, and primarily the face of the BMA, that was needed to build trust and provide a technical overview of what we were doing in Bermuda and whether or not it was considered equivalent with Solvency II.”

Mr Cox paid tribute to the team effort that secured the success, noting key roles played by the BMA’s Craig Swan, managing director of insurance supervision, and Shauna MacKenzie, director of legal policy enforcement.

And Mr Cox recalled the former Governor, Sir Richard Gozney, attending a conference in 2011 with the then-Premier Paula Cox, “making it clear to the European Commission and other European regulators, that Bermuda has the ability to negotiate these type of arrangements independent of the UK”.

He added that Sir Richard and Ms Cox met with “key influential people” within the EU Commission and members of the European parliament to spread that message, and had done “a very good job”.

Late last year Bermuda avoided being placed on an EU blacklist after Britain blocked a French-led proposal that would have automatically branded the island a tax haven.

Jurisdictions with zero per cent corporate tax rate, such as Bermuda, would have been denounced as potentially “non-co-operative” under the proposed change.

While the BMA does not deal with tax policy, Mr Cox offered a personal view on how the island can stand its ground by showing its value to the EU.

He said Bermuda has established its relevance to the EU through its insurance market.

“We are supplying a significant contribution to Europe in the form of reinsurance coverage that has aided the European insurance market by helping them to lower costs for their consumers, and also spread and diversify risk.”

As examples, Bermuda insurers and reinsurers covered half the insured losses from the sinking of the Costa Concordia cruise ship off the coast of Italy in 2012, and covered about 20 per cent of the estimated $1 billion market loss for the 2009 Air France crash in the Atlantic.

Mr Cox said Bermuda would not have been able to get through even the first stage of the Solvency II equivalency assessment if it had not been able to show its relevance to Europe.

“The fact that we were one of three jurisdictions that were assessed, signifies that they understood and connected with that, and recognised how important Bermuda is.”

Mr Cox said that a week ago, while he was in London, an individual in Brussels mentioned to him that Bermuda has been able to distance itself from many other third-county jurisdictions because of the equivalence exercise.

“People look at us very differently because of that and we will be judged favourably because of that. We are a partner and contributor to Europe’s success, not detracting from it,” Mr Cox said.

And regarding possible tax changes in the US, he said it was a similar argument, with Bermuda, through the detailed work of the Association of Bermuda Insurers and Reinsurers, able to demonstrate the contribution and benefits the island’s market makes to the US.

Mr Cox spoke to The Royal Gazette at the Risk and Insurance Management Society’s annual conference in Philadelphia this week.

For many years the BMA has been part of the Bermuda delegation at Rims, which attracts 10,000 insurance leaders from across North America and elsewhere.

Explaining why it was important for the BMA to be present, Mr Cox said: “Regulation is always going to be a critical issue to someone making decisions about whether or not to come into Bermuda.

“If we were to disconnect from this, there are too many questions that wouldn’t get answered. Being part of it is what we have always said about Bermuda being a one-stop shop.

“You have everybody here, you can touch the industry, you can touch the Government and you can touch the regulator — and that gives you a good sense of what you would expect in Bermuda.

“You get the questions answered as opposed to having some questions answered and some unanswered. So the decision-making process is much faster.”

He added: “People always get a better feeling towards a jurisdiction if they can leave something like this with their questions answered.

“It would be foolhardy for BMA to pull away from ‘Team Bermuda’ and decide it is not going to attend this kind of event.

“It’s the partnership and the team approach that has really benefited Bermuda for so long, so let’s continue and enhance it.”

Our reporter travelled to Rims courtesy of JetBlue, which provided flights between Bermuda and New York.