A Bermudian-based insurance company that operates entirely in bitcoin has become the first to receive a Class IILT licence from the Bermuda Monetary Authority.

Meanwhile Insurance Bitcoin (Bermuda) Ltd, a subsidiary of the Delaware-headquartered Meanwhile group, has graduated from the BMA’s innovation sandbox and is now a fully licensed long-term insurer.

Meanwhile’s island-based operating subsidiary does all the business of the group.

Cofounder and chief executive Zac Townsend said Meanwhile is the only life insurer anywhere in the world that operates entirely in bitcoin.

Meanwhile states its statutory financials, economic balance sheet, reserves and other regulatory filings entirely in BTC. All premiums and claims are paid entirely in BTC.

Mr Townsend said: “This approval validates our innovative approach to life insurance and marks a significant milestone in our mission — allowing us to credibly make promises to our policyholders for decades to come.

“We are excited to continue innovating within the life insurance industry to bring solutions to the millions of participants in the digital asset economy.”

This approval of Meanwhile’s insurance business follows an 18-month process building in the BMA’s Insurance Regulatory Sandbox.

To graduate, Mr Townsend said, Meanwhile had to create, launch, and validate the governance, risk, and compliance operations of a life insurer to comply with the BMA’s Solvency II equivalent regulatory requirements.

Mr Townsend said: “That’s why it took so long. We have been working with the BMA very closely to figure out what the solvency calculations look like.

“The BMA had to create a BSCR spreadsheet for the class, and one for us. There was a lot of care and concern about how a long-term insurer could operate in an innovative fashion.”

For governance, Meanwhile brought on independent non-executive directors across accounting, actuarial and technical expertise.

Joining Meanwhile as INEDs are reinsurance industry veteran Jason Carne, HSCM Bermuda executive Gokul Sudarsana and Sandra DeSilva, chief executive of Mythen Re and CEO and chief software architect of Nova Ltd.

Meanwhile launched a full enterprise risk management framework and built out compliance operations.

The company had to create anti-money laundering, antiterrorist financing and know-your-customer protocols as well.

Mr Townsend said: “Those are things that every insurer has to do and we had to prove to the BMA that we can comfortably do them while operating entirely in Bitcoin.

“It was a pleasure to work with them, but it took a while. We are happy to get through all of the hoops and get the full licence.”

Mr Townsend said the BMA’s rigorous approach benefits Meanwhile.

“This is the advantage of Bermuda in general — that the BMA is serious and everyone knows they’re serious. As we talk to customers, as we talk to potential partners, being in Bermuda and regulated by the BMA is an advantage for us because of that care and concern.

“We are really happy that Bermuda is our home.”

Mr Townsend said Meanwhile was able to write business while in the innovation sandbox, and had to get enough take-up for the BMA to believe that there would be demand for the product.

However, the contracts had language that they might have to be cancelled should a full licence not be granted.

Having a full licence opens up possibilities.

“The big changes are that we can really write contracts that are supposed to last long-term, and that within the bounds of the business plan we can launch additional products if we want.”

Founded in 2021, Meanwhile offers licensed and regulated whole life insurance in Bitcoin. It is restricted to targeting only “sophisticated customers”.

Mr Townsend said: “Our target customer is that high net worth individual globally who believes that bitcoin will be a store of value for the long term.

“There are between 750,000 and 1 million people worldwide who have at least one bitcoin.”

Chief financial and operations officer Tia Beckmann is the sole staff member in Bermuda, having previously worked at Deloitte’s offices in Bermuda and the British Virgin Islands.

However, she will be joined at the company’s Front Street, Hamilton, office in January by a chief risk officer and a chief compliance officer, both of whom are working their notice periods at other organisations on island.

The Meanwhile group has eight staff overall, with all but Ms Beckmann working remotely including San Francisco-based Mr Townsend, who said he has paid ten visits to the island since the beginning of last year.