Solvency 2 Internal Model Approval Process (IMAP)
Pre-application Qualifying Criteria Assessment Template
Bermuda and Solvency ii
Equivalence
Bermuda
Monetary Authority CEO Jeremy Cox spoke at the Bermuda Insurance
Institute Spring luncheon at the Hamilton Princess Hotel,
Bermuda.
Welcome to the March 2010
edition of the Solvency ii Association
newsletter
Dear Members,
Today we will discuss an
interesting paper, one of the first templates given by the FSA,
London, about the Internal Model Approval Process (IMAP) -
Pre-application qualifying criteria. We will also read a very
interesting approach by
Bermuda Monetary Authority CEO Jeremy Cox, about the challenges
and opportunities of Bermuda after the Solvency ii directive.
Enjoy!
Solvency 2 – Internal Model Approval Process (IMAP)
Pre-application Qualifying Criteria Assessment Template
Introduction
This document is
intended solely and exclusively for use in our
pre-application process, which
forms part of our plans for the implementation of the Solvency 2
Directive (“The Directive”).
The directive requirements on
firms will take effect from 31 October 2012.
This document should be read
in conjunction with the CEIOPS Consultation Paper 80, Draft
CEIOPS level 3 guidance on Solvency 2: Pre-application process
for internal models.
CEIOPS have proposed that
criteria for resource allocation be used to ensure that the
resources of supervisory authorities are used as efficiently and
effectively as possible.
Firms will need to demonstrate
their progress by providing evidence that they have:
1. An
approved Solvency 2 implementation plan;
2. Plans to
iteratively develop the internal model;
3. An index and
summary of the draft documentation of the model; and
4.
Completed QIS4.
As a firm that has indicated
it would like to start the pre-application, you are asked to
complete this template.
You should answer the questions
based on your current preparation for starting the
pre-application phase of the internal model approval process.
The template should be
completed with respect to all financial undertakings that will
be covered by the internal model and which the FSA will have to
consider as part of the approval process:
A. In the case of insurance
groups where the FSA is the EEA lead regulator, this would
include all (global) financial
undertakings that are planned to be captured within the
scope of the group internal model plus any UK insurance entities
for which individual solo applications will be submitted.
B. In the case of insurance
groups where the FSA is not the EEA lead
regulator this would include all UK financial
undertakings that are planned to be captured within the scope of
the group internal model or for which an individual solo
application will be submitted.
To avoid the need for
excessive follow-up meetings, we have designed this document to
be reasonably self-contained.
We expect
around 35 pages in total for the completed document.
We reserve the right to
review documentation and other sources referred to in your
answers
Next steps
Please send your signed and completed
pre-application qualifying criteria assessment template
(the assessment template) to your FSA supervisor
at least one month before your intended
start date for the pre-application process.
We will review the submission
and notify firms of our decision within one month of receipt.
If it is not possible to make a
decision and notify the firm within the indicated timeframe,
then we will write to the firm and give a precise date by which
they will receive a response.
The decision will typically
take one of the following three forms:
• The
firm may start pre-application on the scheduled date.
• The
firm may start pre-application on the scheduled date, subject to
completion of further work before that date.
• The firm may
start pre-application at a later specified date than the
original scheduled date, subject to re-submission and
re-assessment of the pre-application qualifying criteria
template after additional work has been completed
1. Solvency
2 implementation plan
The principal aims for
requesting an implementation plan are
to
ensure that your firm:
A. Has
considered the requirements of the directive and potential
future implementing measures against your current practices;
B. Has considered and achieved sign off on the activity,
timelines and resources required to deliver Solvency 2;
C. Is
in a position to engage with us about your internal model; and
D. Can complete your internal model in line with the Solvency 2
timeframe.
1.1
What project documentation (e.g. project brief, project
initiation document) exists for your Solvency 2
Project/Programme and who has provided internal sign-off on
this?
(Up to one page)
1.2 Please provide us with
details of your Solvency 2 project/programme, including activity
that specifically relates to the design, build and
implementation of your internal model as set out below:
a) Your
project plans (pdf copy of Gantt chart or equivalent) including
your key milestones.
b) Critical path analysis.
c) Key
deliverables, including dates for delivery.
d) Key
dependencies and assumptions.
e) Key risks and issues to the
plan and mitigating actions in place.
f) Estimates of the
resource requirements, in particular the level of full-time
equivalent (FTE) dedicated resource split by
department/function.
g) Approved Solvency 2 budget by the
Board.
(Up to ten pages)
1.3 Please give details of
any aspects where you believe further
planning is required. Please advise why this planning has
not yet taken place and when you expect to undertake this.
(Up to one page)
1.4 Please provide us with
the details of the governance around your Solvency 2
project/programme, including activity that specifically relates
to the design, build and implementation of your internal model
as set out below:
a) Your
project/programme structure.
b) Key committees and details of
membership and roles and responsibilities.
c) Steering groups
and details of membership and roles and responsibilities.
d)
Other key project personnel.
e) Levels of engagement and
sign-off from senior management/the Board.
f) Levels of
engagement with the ultimate parent/EEA parent and the lead
supervisor/EEA lead supervisor (if not the FSA).
This should
include details of your decision making process and frequency of
reporting against your plan and the level of
monitoring/challenge.
(Up to four pages)
1.5 Please provide us with
your contingency plans for calculation of the Solvency Capital
Requirement (SCR) and possible capital planning implications if
your internal model is not approved in full in accordance with
Articles 101 and 112-127 of the directive.
(Up to one page)
2.
Plans to iteratively develop your internal model
In the run-up to October
2012, firms will be expected to provide details of plans to
iteratively develop their internal model.
2.1
Risk management and use test
Please provide details of
how you will develop your system of governance, in particular
your risk management system, to make sure that risks are
adequately identified, measured, monitored, managed and reported
and that the internal model is widely used in your risk
management and decision-making processes, including your
economic and solvency capital assessment and allocation
processes. (See Articles 112(5) and 120 of the Framework
Directive.)
(Up to one page)
2.2
Data management
Please provide details of how you will
develop your data management and data governance in order to
demonstrate that data is „complete, accurate and appropriate‟.
(See Article 121(3).)
(Up to one page)
2.3
Model validation
Please provide details of how you
will develop your validation processes in order to monitor the
performance of your internal model, ensure that weaknesses are
identified, and that the performance of the internal model and
the status of efforts to improve previously identified
weaknesses are communicated to the board. (See Article 44(5) and
Article 124.)
(Up to one page)
2.4 Please provide details of
how your Solvency 2 programme, including activity that
specifically relates to the design, build and implementation of
your internal model is flexible enough to absorb and cope with
change.
(Up to one page)
3.
Documentation of the model
The documentation standards
detailed in Article 125 are as important as the other standards
that need to be met to use an internal model to calculate the
SCR.
To start pre-application, the
level of documentation is not expected to be perfect or
complete, but your firm will need to demonstrate that you have
made good progress in documenting your model and that you are
addressing the documentation standards detailed in Article 125
of the directive.
3.1
Index of internal model documentation
Please provide
an index of all your internal model documentation addressing the
documentation standards detailed in Article 125 of the
directive.
(Up to two pages)
3.2
Model scope and architecture
Please provide a summary
of your draft internal model documentation that sets out the
following:
a) The
scope of the internal model, including the legal entities4, risk
modules and/or business lines covered.
b) Details of the
model platform(s) to be used, as well as the main data sources,
data flows and data warehouses.
c) The modelling
approach/techniques used for each key risk module, i.e.
stochastic model, univariate stresses, combined stress,
replicating formula/portfolio.
d) An explanation of the
aggregation methodologies used to combine the outputs for
specific risk modules and/or business lines, as well as the
proposed method for the inclusion of legal entities in the
determination of group solvency, where applicable, (i.e.
accounting consolidation method or deduction/aggregation
method).
e) Drawbacks and weaknesses of the model, including
circumstances under which the internal model does not work
effectively.
(Up to six pages)
3.3
Documentation process
Please provide a brief overview
of your internal model documentation process, including the
following:
a) The
approach adopted towards the development and maintenance of
documentation.
b) How often the documentation is
updated/reviewed.
c) The individual or team responsible for
updating the documentation.
d) An explanation of the controls
for the continued monitoring of documentation (e.g. change
control).
e) How all major changes (as detailed in Article
115 of the directive) to your internal model will be documented.
(Up to one page).
3.4 Compliance with
Article 120 to 124 of the directive
To the extent not already covered in 2.1-2.3, please provide a
brief description of how your current level of documentation
demonstrates compliance or otherwise with:
a)
Article 120 – Use test
b) Article 121 – Statistical quality
standards
c) Article 122 – Calibration standards
d)
Article 123 – Profit and loss attribution
e) Article 124 –
Validation standards
(Up to two pages)
3.5 External providers
To
the extent not already covered in 2.1-2.3 or 3.2, Please provide
a brief overview of the parts of your model provided by a third
party including the following:
a) The
parts of the model which are provided by an external provider.
b) The parts of the model built with the assistance of a third
party.
c) Clear identification and explanation of the
involvement of all third parties.
d) Any challenges you face
in meeting the documentation standards of the directive as a
result of the use of any external model or data providers.
(Up to one page)
4
Completion of QIS4
Answers to the following
questions will be used to support judgement about whether your
firm has completed the fourth Quantitative Impact Study to an
adequate standard for pre-application.
4.1 Submission of
QIS4 to the FSA
Have you
completed the QIS4 spreadsheet for all entities and lines of
business in your group detailed in the response to 3.2(a) as
well as for the group as a whole, where applicable, and
submitted it to the FSA? If yes, then please go to 4.2,
otherwise complete 4.1a and b:
a) If you have completed the
QIS4 spreadsheet but have not yet submitted it to the FSA,
please submit a completed QIS4 spreadsheet with this
application.
b) If you have completed the QIS4 spreadsheet
but not included all entities detailed in the response to
3.2(a), then please indicate which entities are not included and
the reason for the exclusion of those entities.
(Up to one
page plus QIS4)
4.2 Please indicate where you
have had difficulties in completing QIS4 (including relevant
references to the QIS4 spreadsheet tab/cell) and what these
problems were.
(Up to one page)
4.3 For each of the areas
where you used approximations or proxies when completing QIS4,
but that may not be permissible to be applied as simplifications
in Solvency 2 (see CEIOPS draft advice in Consultation Papers
45, 76 and 77), please provide the FSA with your plans for
moving away from these approaches for major lines of business or
major risk drivers by 2012.
(Up to one page)
4.4 If you have updated the
inputs to your QIS4 spreadsheet since you previously submitted
it to the FSA, then please explain the impact of these changes
(for instance have you used inputs for a more recent valuation
date)?
(Up to one page)
4.5 Please provide brief
comments on the results of your QIS4 submission covering the
following:
a) The effect of Solvency 2
on the regulatory capital requirements and regulatory balance
sheet of entities and lines of business in your group (detailed
in response to 3.2(a)) with the exception of those entities
highlighted in 4.1(b), as well as for the group as a whole,
where applicable.
b) Aspects of the standard
formula that do not reflect your risk profile and the reasons
why.
c) How the results from the standard formula compare to
those from your current internal model. (please provide
estimates)
(Up to one page for responses to b and c)
4.6 Please provide a brief
summary of your preparations for the QIS5 exercise, including
your anticipated resource allocation and any potential risks you
face in completing this exercise.
(Up to one page)
5 Sign-off
This assessment template
should be signed at CEO level in order to demonstrate
board level engagement.
Please note that we intend to
use the information that you provide in this template or will
provide in connection with your pre-application in the same
manner as we would be permitted or required to do when
considering the approval of an internal model under the Solvency
2 directive (including sharing that information where
appropriate with other relevant supervisory authorities).
By
submitting this application form
I confirm that the
information provided in sections 1-4 of this document is
accurate and complete to the best of my knowledge and belief and
I have taken all reasonable steps to ensure that this is the
case.
I am aware that some questions do not require
supporting evidence, but the records that support the
application must be made available to the FSA on request.
I
will notify the FSA immediately if there is a significant change
to the information given in the form. If I fail to do so, this
may result in a delay in the application process.
Date
___________________________________________________________________________________
Name of signatory
________________________________________________________________________
Position of signatory
______________________________________________________________________
Signature
_______________________________________________________________________________
Bermuda and Solvency ii
Equivalence
Bermuda Monetary Authority CEO Jeremy Cox
spoke at the Bermuda Insurance Institute Spring luncheon at the
Hamilton Princess Hotel, Bermuda.
Speech by
Jeremy Cox
I do hope you are all sitting comfortably
because I'd like to start off with a little story. It's got all
the elements you would expect: an unusual setting, some
interesting characters, an engaging plot, a journey of discovery
and of course, the inevitable ingredient: conflict. This story
also has a beginning and a middle, but it doesn't have an end,
not yet! But I'll return to that a little later.
So let's
begin . Once upon a time, a long time ago there lived a special
group of people in a rather special land. These people were risk
professionals and they were exceptionally good at what they did.
In fact, they were so good and so committed to developing their
product that they soon built a glittering reputation for
themselves and for the island they inhabited.
They had a
fairly simple value proposition: "Bring your risk business to us
and we will look after it for you. We understand financial risk
and we understand your business. And don't worry about excessive
red tape because we don't have any here. There are some
regulations of course but they're very light and easy to live
with and you really don't need to worry about them. Plus we also
have a great relationship with the authorities, more like a
friendly partnership really. In fact, the chief regulator is
such a strong supporter of ours that he regularly travels the
world actively promoting and marketing our services."
Thus was born an early version of the Bermuda brand. These were
pioneering times when all interests were fully aligned behind
the single idea of creating a Bermuda Market. Everyone in those
days was singing off the same hymn sheet: Government,
professional service providers, the insurance managers and the
regulator who, by the way, was then part of the Ministry of
Finance. And it worked. It became a powerful and successful
partnership. Everybody wanted to buy what they were selling
which, in those days, was one form or another of a captive
insurance programme. And every client was attracted by the idea
of doing business in a friendly, favourably taxed and lightly
regulated environment.
These were heady and exciting
days. The business rolled in. Everyone was happy. Captive
insurance management firms sprang up and the island became a
Mecca for financial professionals.
I know because I was
part of the resulting rush for accounting qualifications, a rush
driven in large part by the 1978 Insurance Act, which helped
increase demand for public accounting services. I well remember
sitting in the offices of Arthur Andersen and thinking how
fortunate I was to be involved in what was then referred to as
the exempted company business.
But imitation, they say,
is the sincerest form of flattery and Bermuda pretty soon
attracted the unwanted attention of other domiciles who quickly
opened their doors for business. The barrier to entry in those
days was not particularly high. There was a rather clubby
vetting process in which new market entrants had to present
their proposed business plans and projections to a committee of
existing market players in order to be granted a license. By and
large, this was a system of self regulation or co-supervision in
which the law firms, the accounting practitioners, the banks,
the insurance managers and the Registrar of Companies
collectively policed the market. From the outside it probably
appeared to be a little too cozy at times ... but it generally
worked. That's not to say we didn't have any problems. After
all, we had entered the era of what came to be called "naive
capacity" so there were occasional hiccups but nothing that made
us feel too uncomfortable.
Part of the reason for this
comfort level was that the regulatory visionaries of the day had
built some early warning safeguards into the system. These
included the mandatory appointment by every licensed insurer of
a Principal Representative, a resident who was responsible for
informing the regulator, amongst other things, of any change in
the insurer's circumstances that could lead to an inability to
pay claims. In addition, the Insurance Act created an entity
known as the Insurance Advisory Committee, which was, and still
is, a statutory body charged with advising the Minister of
Finance of trends and developments in the insurance industry.
These measures, along with the comparatively low-risk nature of
the business that came to Bermuda at that time, proved to be
adequate, even to the point of withstanding the occasional
fairly significant captive insolvency. Indeed, Bermuda soon
demonstrated that it was able to apply the same level of
professional expertise to insolvencies that it provided to
incorporations.
Then came the crossroads, the US
casualty insurance crunch of the mid 1980s and, in rapid
succession, the formation of ACE and XL. Pretty soon, the
Bermuda Government and the insurance industry realized that our
cozy self regulatory environment would need to be reviewed. By
the early nineties it became clear that the regulatory rule book
which had been written for what was predominantly a captive
insurance industry was in need of an overhaul, one that
recognized that the market had changed but the regulations
hadn't.
By the end of 1995, after much consultation,
Bermuda had adopted its first multi-license system of
regulation, a risk-based system now seen as a forerunner of our
present-day licensing framework.
The regulator then, as
now, faced some difficult challenges as he sought to protect the
Bermuda brand. In addition to technical expertise he needed very
sensitive antennae and some highly developed tightrope walking
skills. It was a sometimes precarious balancing act. He had to
carefully pick out from the clamour the voices of those who
lobbied for what they claimed was the insurance wave of the
future. He then had to balance their arguments against the
arguments of those who had ridden in on an earlier wave, And he
needed to be ever mindful that the risks and rewards of a
particular course of action would be scrutinized and generally
picked apart by every competing insurance jurisdiction in the
world, eagerly trawling for errors or sloppy drafting or ways
they could simply improve their own rulebook.
Not that
there was anything particularly wrong with light touch
supervision at that time. After all, no standards were agreed
for the supervision of reinsurance until October 2003.
The addition to the Bermuda register of ACE and XL and other
companies that didn't behave like captives, even though some of
the new entrants resembled large group-owned entities, was an
early test for the Bermuda brand, which was beginning to be
re-shaped, initially ever so slightly.
The all-for-one
and one-for-all song which the market had been singing was
losing its popularity and the lyrics of the old hymn sheet were
gradually being re-written. It seemed that the captive movement
and the nascent commercial market did not always want the same
thing. Interests were no longer identical.
Over the next
few years, as Bermuda's commercial market grew, it seemed that
reference to a partnership between the regulator and the
regulated was not always appropriate or as widely welcomed by
everyone. The light touch began to give way to the firm hand of
the regulator, alignments began to lose their shape and,
gradually, what was once considered the advantage of a mild
regulatory climate began to be seen by some as a distinct
disadvantage. Customers increasingly wanted to be able to point
to a robust regulatory environment, not light touch supervision.
Additionally, as the market grew, the regulator's marketing role
shrank.
It will be for history to judge whether one end
of the market was accommodated at the expense of the other? Did
everyone fully understand the nuances and ambiguities? Did they
realize that they were part of an industry in transition?
Fast forward that story to today and you will see that many
of these issues are now firmly reflected in our
multi-disciplined, many tiered insurance and reinsurance
industry, which draws its strength from a unique mix of
differences and similarities.
Where does that leave the
BMA? Where should the regulator sit on these and other points of
potential conflict? I believe, and I've said it before, that the
Bermuda Monetary Authority is a consistent regulator for all
seasons, for peacetime as well as wartime, for periods of
economic contraction as well as expansion. And I believe it is
fortunate that we have weathered occasional squalls in the past
because I think we have entered a potentially stormy period.
And the
name of the next weather system is Solvency 2.
The Solvency 2 Directive is a law that
will soon govern solvency requirements for insurers operating
throughout Europe. Given the significant amount of insurance
business conducted between the Bermuda insurance market and
Europe, it is important that we ensure our regulations are
deemed to be equivalent to Solvency 2's requirements.
Is
equivalence under Solvency 2 the final frontier for Bermuda?
Probably not. It is in the nature of things for us to face
Solvency 3 or 4 and so on. But for now Solvency 2 equivalence is
indeed the Holy Grail.
To get a sense of just how
important this Directive is, you need to remember that Bermuda's
Class 4 companies have a global
footprint. Their principal interest is not how much they will
save on their effective tax rate by being in Bermuda, or whether
they can hire adequate support staff in Hamilton, or find
appropriate office accommodation. By far the biggest concern for
these companies, the issue that will have most bearing on their
domicile selection, indeed on whether they remain in Bermuda, is
the quality of regulation over time. For these companies, and
for our Class 3(B) license holders, it is
absolutely vital that Bermuda secures equivalence under the
Solvency 2 Directive.
For these companies,
equivalence is their passport to
non-discriminatory treatment in those markets in which they wish
to trade. And when I say non-discriminatory treatment,
I'm referring, for example, to not being
made subject to special contingent capital requirements which
could be applied by an EU supervisor who does not recognize the
regulatory provisions in your country of domicile as providing
the same protections and safeguards as those afforded in the
country in which you are seeking to conduct business.
So, the inevitable question: Will
Bermuda get equivalency? The only way I can answer that question
is to tell you what we've done and what we plan to do.
In August 2008 we announced significant enhancements to
insurance solvency and disclosure regulations. The Insurance
Amendment Act 2008 introduced new and expanded regulatory
initiatives and the Bermuda Solvency Capital Requirement (BSCR),
which was an enhanced solvency regime applicable to the Class 4
license holders.
The BSCR was intended to build on
Bermuda's existing solvency regime by establishing risk-based
capital adequacy standards for high impact insurers. This
allowed for a more risk sensitive approach to setting solvency
requirements for our insurers and was in line with capital
adequacy standards set out in Solvency 2. The amended
legislation also allowed the use of approved internal economic
capital models and the publication of financial statements
submitted to the Authority by Class 4 companies using Generally
Accepted Accounting Principles or GAAP, again in line with
international standards relating to transparency.
At the
same time, the legislation reclassified Bermuda's Class 3
insurance sector, which includes a large number of firms ranging
from captives writing a limited amount of third-party business
to large, purely commercial (re)insurers. This change
established sub-categories within the Class 3 group based on
respective risk profiles and allowed us to refine our
application of risk-based supervision for these companies to
ensure they receive a level of oversight appropriate to their
business.
Along with the reclassification we introduced a
new category of 'Special Purpose Insurer' focused on fully
collateralized special purpose vehicles that are established to
conduct certain specific insurance transactions.
More
recently in our 2010 Business Plan, we explained that a key part
of the equivalence effort will be the introduction of group
supervision for Bermuda's largest insurers, to ensure that all
the risks related to a particular insurance group are considered
in our supervisory process. The Plan also talked about
developing enhanced solvency and capital standards for long-term
or life insurers; establishing a framework for eligible capital
standards; further enhancements to insurer risk assessment
requirements; piloting the applications and review process for
our internal models framework; and introducing a Code of Conduct
for the insurance market.
It's important for me to note
here that, while we are committed to
ensuring we achieve consistency with international standards set
by initiatives such as Solvency 2, we do not intend to clone
them and blindly apply them here. Instead, we aim to adapt such
standards appropriately to take account of the nature of
business conducted in Bermuda and the characteristics of this
market to ensure our frameworks remain practical as well as
equivalent.
Another key aspect of the BMA's
strategic role is to maintain a high level of engagement and
participation in the work of international standard setting
bodies. We now represent Bermuda at the decision-making level in
the International Association of Insurance Supervisors, the
IAIS, which sets the global standards for insurance supervision.
In fact, we sat on the IAIS working group that created the first
standard for reinsurance supervision in 2003 which I mentioned
earlier. I now chair the IAIS Reinsurance Transparency Sub-group
and am Vice Chairman of the IAIS Reinsurance Sub Committee. I
became a member of the IAIS Executive Committee this year and
the Authority now participates in a total of 13 IAIS committees
and sub-committees, thereby enabling us to monitor and
contribute to the evolving international regulatory environment.
I hope I've given you a sense of how the BMA, while evolving
and adapting to changing needs, has constantly sought to protect
the Bermuda brand and the jurisdiction's reputation over the
years.
Now I know what you're
thinking. I can almost hear the question: That's all very
interesting Jeremy, but what about the Holy Grail of Solvency 2
equivalence? Will Bermuda get it?
And here's my answer: Bermuda now has a
robust risk-based prudential supervisory framework in place. We
are well on our way to being able to tick the box on group
supervision. We have earned the respect of regulators and the
regulated for our leadership as a financial supervisor. So ...
If we continue to do all that is being asked of us ... if the
Solvency 2 assessors who will be visiting later this year give
us a passing grade ... (and I will do everything in my power to
make that happen) ... there is no technical impediment that I am
aware of that will prevent us from being granted equivalence.
Said another way ... If Bermuda does not get equivalence, it
will not be because we lack the technical expertise. We clearly
don't ... as many of you in this room can attest. It will not be
because we have a record of corporate failures. Our record
indicates the opposite. It will not be because we have lost the
support of the marketplace. We continue to attract new business
and to add new companies to our register. If Bermuda fails to
secure equivalency, it is highly likely to be due to the arcane
politics of Europe. After all, what other reason could there be
to exclude a respectable jurisdiction with an industry that
provides an estimated 10% of broker market reinsurance capacity
to the European market, an estimated 40% of windstorm and flood
reinsurance to Europe's leading property and casualty insurers
and which employs approximately 7,000 people in the EU?
Will having a credible brand help? Absolutely it will
help. A good brand goes on talking long after you have left your
customer's office. A solid reputation and a world class image of
financial strength, stability and expertise have long been the
hallmark of the Bermuda brand and will continue to speak volumes
about us.
This is because the promise of your brand is
not confined to what you say on your web site, or what your logo
says, or your literature, or even your CEO. In fact, it's not
really what you say that determines your brand. Indeed, your
brand is not so much what you say it is, it's what your
customers say it is.
Earlier, when I spoke about the
pioneering days of the Bermuda insurance industry, I referred to
my story as having a beginning and a middle but that the ending
was still to be determined. That's because, when it comes to
reputations, in my experience, they seldom stray very far from
the path of actions taken by people and organisations and
regulators. In other words, our brand, our reputation is largely
in our hands and is, therefore, always a work in progress.
That said, I think it is particularly important that
everyone understands the Authority's brand: its risk-based
approach to regulation which remains effective for the Bermuda
market. It is this approach that allows us to differentiate
between captive and commercial supervision and to allocate
resources efficiently to firms with higher risk profiles.
In closing I should tell you that I have been a regulator
for more than 17 years and I have seen several versions of the
Bermuda market brand come and go. I guess that's the reality of
changing expectations, a shifting context and the ability to
reinvent yourself as circumstances demand. Currently there's an
expectation that Bermuda's regulator needs to communicate that
he has wide powers and real teeth, that he is able to stand
shoulder to shoulder with international regulators, and that he
is ready to apply his powers or as one CEO put it the other day,
show that he is willing to hold CEOs accountable and is prepared
to heavily penalize those who engage in imprudent practices.
I will resist the temptation to say be careful what you wish
for because I believe that all of that is true. I do have to
provide that context for our global insurers. But, ladies and
gentlemen, I also believe we are at another cross roads in the
development of the Bermuda insurance industry and I think that
the best way I can guard the Bermuda brand is simply to continue
to demonstrate the competency, accomplishments and technical
strength of the BMA, its people and its tough risk-based
regulatory framework.
Download the 190 pages e-book: "Discover 100 Job Descriptions in
Risk and Compliance Management and what it takes to get hired. Which
factors matter"
It is a great reference book, developed in 2010, free to all
members of the Association.
Contents
1.
Risk
Professionals
2.
Compliance
Professionals
3.
Sarbanes Oxley
Professionals
4.
Basel ii
Professionals
5.
Solvency ii
Professionals
6.
Hedge Funds
Professionals
7. Members of the
Board of Directors
Dear members,
The Solvency ii Association develops and maintains a
compendium of Solvency ii related risk and compliance topics.
Subject matter experts review and update this body of knowledge.
The Solvency ii Association offers two Solvency ii
certification programs:
A. Certified Solvency ii
Professional (CSiiP) for professionals working in the EEA
countries
B. Certified Solvency ii Equivalence
Professional (CSiiEP) for professionals working in non-EEA
countries
The Solvency ii Association has signed an
exclusive worldwide partner agreement with Solvency II Training
Ltd., so the Association will provide Solvency II Training
classes worldwide only in cooperation with Solvency II Training
Ltd.
As Corporate Affiliates of The Institute of
Continuing Professional Development (CPD) our three-day Solvency
II training courses offer delegates a total of 24 (CPD) hours.
Contact: Ross Fenwick, Managing Partner, Solvency II
Training
T: + 44 207 060 3312, F: + 44 207 681 3317
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