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"It is clear that we are on the right track", Bermuda Monetary Authority chief executive, Jeremy Cox, said following a round of talks on Solvency II between the BMA and the European Commission.
Bermuda, home to hundreds of reinsurers attracted by a favourable tax regime, wants the EU to recognise its capital regime as equivalent to Solvency II otherwise it might lose business from European insurers. If Bermuda's regime does not win equivalent status, European insurers would not, under Solvency II, be able to count the full value of Bermudan reinsurance contracts towards their capital.
Bermuda-based reinsurers, which include Catlin, Endurance, Hiscox, Montpelier Re and Validus, account for about 40 per cent of the European property catastrophe reinsurance market, according to EU insurance regulator, EIOPA. In a preliminary assessment last October, EIOPA said Bermuda's regulatory regime for big insurers mostly complied with Solvency II.
Under draft proposals currently being discussed by EU officials and lawmakers, non-EU countries would be given six years to bring their regimes into line, although some European insurers want this extended to 10 years.