The Bermuda Monetary Authority (BMA), Bermuda’s integrated regulator and supervisor for the financial services sector, continues to drive innovation in the Insurance Linked Securities (ILS) market.
The BMA highlights that Bermuda’s ILS market is built on a foundation of prudence and practicality, underpinned by a regulatory framework designed to respond to the evolving needs of policyholders.
Leveraging its established Special Purpose Insurer (SPI) framework, the BMA is intensifying efforts to address protection gaps arising from climate change and emerging risks.
In line with this commitment, the BMA plans to issue a Consultation Paper in the fourth quarter of 2025 proposing a new SPI framework specifically tailored for parametric products.
As climate factors alter the nature, scale, and frequency of Natural Catastrophe (Nat Cat) events globally, the financial exposure faced by policyholders continues to increase. This is further compounded by non-traditional risks such as cyber threats, highlighting the need for innovative market solutions.
The BMA emphasises that a purpose-built framework for parametric insurance is central to developing a resilient parametric market.
Such a market can help policyholders fill gaps not covered by traditional indemnity insurance while providing faster claims and payout processes to support recovery following loss events.
As global risk dynamics evolve, the BMA remains committed to ensuring Bermuda’s insurance sector offers solutions aligned with policyholder needs, maintaining a robust and trusted regulatory environment that supports continued innovation and market resilience.
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