829-January 2012 Regulatory Update (FINAL)

8/3/2019 829-January 2012 Regulatory Update (FINAL)

1/20

Regulator Update Januar 2012


2/20

Table o Contents

Preace 1

Regulatory and 2Legislative Developments

1. Insurance 22. Banking 33. Investment Funds 44. Anti-Money Laundering (AML) 4

International Outlook 5

Market Analysis and Statistics 7

1. Bermuda Money Supply 72. Domestic and Foreign 8Currency Position

3. Bermuda Stock Exchange (BSX) 94. Banking 105. Investment Funds 136. Insurance 147. Company Authorisations 15

Statistical IndexBermuda Money Supply 7

BD$ Deposit and Loan Prole - 8

Combined Banks and Deposit Companies

Foreign Currency Position - 8

Combined Banks and Deposit Companies

Bermuda Stock Exchange (BSX) 9

Banking Sector Assets and Deposits 10

Regulatory Capital to Risk Weighted Assets 11

Combined Balance Sheet o Bermuda 12

Banks and Deposit Companies

Investment Funds Statistics 13

Insurance Company Registration Statistics 14

Companies, Partnerships and 15

Permits Statistics- Applications Approved

Regulatory Update January 2012


3/20

01

Preace

This bulletin reports on recent activities at the

Bermuda Monetary Authority (the Authority)

and recent developments aecting the nancial

sector, as well as the community generally.

Attached to it are the regular statistical data

covering Bermuda dollar money supply, Bermuda

banks balance sheet analysis and other nancial

and company sector inormation, updated or

the quarter ended 30th September 2011.

The Regulatory Update is published in print

and electronic ormats. The electronic version

is available on the Authoritys website

www.bma.bm and can be downloaded as a

PDF le. I you wish to receive an email notice

when the electronic version is available, you

may sign-up to our e-subscriptions service by

emailing your request to [email protected].

I you currently receive the print version and

would like to receive the electronic version

instead, please indicate this in your request.


4/20

1. INSURANCESecondary Insurance Legislation Passed

New and amended legislation relating to solvenc

and capital requirements or Bermuda insurers was

introduced to the House o Assembl during the last

two quarters o 2011; each were eective as o 31st

December 2011:

Insurance Amendment Act 2011

Ater consulting with the Bermuda market, the

Insurance Act 1978 (The Act) was amended to etend

enhanced solvenc reporting requirements to Class3A and Class E (Long-Term) insurers. These regulator

requirements are in line with those applicable to other

commercial insurers in Bermuda.

The Act also makes provision or the paid up share

capital requirement or Classes C, D and E insurers to

be $250,000 as opposed to the current requirement

o $500,000. Additionall, ee provisions are to

be amended to allow insurers to pa a prorated

registration ee and or the Authorit to take variations

in business volumes into account when considering

annual ees or insurers.

In addition, the same restrictions that the Authoritcurrentl applies to Class 4 and Class 3B insurers as

regards applications to reduce statutor capital will be

imposed on Classes 3A, Class C and Class D insurers.

Consequential amendments are also made to the

Insurance Accounts Regulations 1980.

Enhanced Solvency Requirements Rules Class 4 and Class 3B Insurers

The Insurance (Prudential Standards) (Class 4 and

Class 3B Solvenc Requirement) Amendment Rules

2011 (Class 4 and 3B Rules) build on eisting

solvenc regime or such rms. The Class 4 and 3B

Rules includes provisions or the Authorit to revokeits approval or rms to use an approved internal

capital model when no longer appropriate. The also

establish more requent lings rom rms that are not

members o an insurance group or which the Authorit

is the appointed Group Wide Supervisor, i.e. quarterl

nancial returns.

Applying BSCR and Internal Models Regimesto Class 3A and Class E Insurers

The basis or appling the Authorits enhanced

solvenc ramework to set regulator capital or Class

3A and Class E (Long-Term) insurers is now established

under two sets o new rules: the Insurance (Prudential

Standards) (Class 3A Solvenc Requirement) Rules

2011 (Class 3A Rules) and the Insurance (Prudential

Standards) (Class E Solvenc Requirement) Rules 2011

(the Class E Rules).

The Class 3A Rules provide or calculating the

applicable eligible capital requirement or such insurersusing the Authorits standard Bermuda Solvenc

Capital RequirementSmall and Medium Entities (BSCR

SME) model. The enable Class 3A rms to appl to

use an internal capital model instead o the standard

BSCRSME model. The Class E rules establish similar

provisions or Bermudas largest lie insurers, using

the standard BSCR model. To build urther eciencies

into this process, the Authorit is also establishing the

platorm or rms in both sectors to submit their capital

and solvenc returns electronicall. These submissions

will include, among other details, the Commercial

Insurers Solvenc Sel-Assessment and a Schedule o

Eligible Capital.

Applying Solvency Standards under GroupSupervision Framework

A series o rules are now in place that establish the

basis or the Authorit to appl its enhanced solvenc

regime and risk management standards to Bermudas

insurance groups. This includes appling the BSCR,

corporate governance requirements and eligible capital

rules to groups or which the Authorit is appointed

Group Wide Supervisor.

The Insurance (Prudential Standards) (Insurance Group

Solvenc Requirement) Rules 2011 prescribe the

method or determining the BSCR or all such insurance

groups, and other statutor ling requirements related

to solvenc which the le annuall with the Authorit.

These Rules shall take eect on 31st December

2011 with the eception o paragraph 3 o the Rules

regarding the dut to compl with the enhanced capital

requirement, which will come into eect on 1st Januar

2013.

Regulatory and LegislativeDevelopments

02Regulatory Update January 2012


5/20

03

The Insurance (Group Supervision) Rules 2011 (the

Group Rules) establish corporate governance and

risk management requirements or insurance groups.

The Rules have been drated to appropriatel refect

the regulator requirements or insurance groups based

on the nature, size, scale and compleit o Bermuda

groups or which the Authorit serves, or epects to

serve as Group Supervisor.

Insurance groups will be supervised or corporate

governance requirements through desk-based and on-

site reviews conducted in a manner broadl similar to

eisting reviews or solo insurers. The will be epected

to demonstrate compliance with the Group Rulesthrough establishing, maintaining and documenting

governance sstems and processes, with related

communications and reporting structures. The groups

must also establish and maintain eective ke unctions

(i.e. internal audit, compliance, risk management and

actuarial). The Group Rules will be eective on 1st

Januar 2013 with the eception o the requirements

or ling statutor returns and group nancial

statements, which will be in eect or lings made in

2012.

Group Supervision and Insurer

Capital AdequacyIn Q4 2011, the Authorit piloted a trial run o the

Groups BSCR with Class 4 and Class 3B insurers or

2010 ear end lings. Phased implementation o

the BSCR or other classes o insurers is epected to

continue through Q4 2013.

2. BANKINGAuthority Publishes Basel IIIDiscussion Paper

In December 2011, the Authorit published a Discussion

Paper which represents the rst step in the process oenhancing Bermudas current regulator ramework

or banks in line with Basel III. The purpose o this

paper is to make the banking sector aware o the ke

eatures o Basel III, to oer preliminar thoughts on its

implementation or Bermuda banks and to seek initial

eedback rom the banks and other stakeholders prior

to a planned ormal consultation process.

The Basel III rules orm part o the Basel Committee on

Banking Supervisions (the Basel Committee) response

to the weaknesses in eisting international banking

supervisor standards highlighted during the nancial

crisis. The ke eatures include:

A reie capial framework; regheig he

qualit o regulator capital; revising minimum capital

standards to more accuratel refect risk; and the

introduction o an additional leverage standard

Frher ameme o rik maageme giace

under Pillar 2

Expaio of exiig marke iciplie atransparenc rules under Pillar 3

Irocio of a ieraioall obere reglaor

minimum liquidit requirement

The Paper is available on the Authorits website,

www.bma.bm, and the market should submit

comme o he BMA b 29h Febrar 2012.

Consultation on Corporate GovernanceCode or Banks Underway

The Authorit has begun consultation with the market

on its proposal to establish a Corporate Governance

Code or Bermudas banks.

During the recent global nancial crisis, poor corporate

governance was identied as one o the ke actors

contributing to banking ailures. One o the Basel

Committees responses to the situation was to seek

to raise the standard o international governance

practice through revision o its Principles or Enhancing

Corporate Governance. The Authorit has sought

consistenc with the Principles in the development o

the Code it is proposing or Bermuda.

The drat Code sets out 13 principles with related

guidance and covers the ollowing ke areas: board

practices; the role o senior management; risk

management and internal controls; compensation;

comple corporate structures; and disclosure and

transparenc.

The drat Code is available on the Authorits website,

www.bma.bm, and the market should submit

comme b 29h Febrar 2012.


6/20


3. InvEstMEnt FundsPhased Rollout o ERICA Begins

In Q4 2011, the Authorit began a phased rollout

o its Electronic Regulator Inormation Compliance

Application (ERICA) to a select group o companies

in Bermudas investment sector. ERICA is designed to

increase the ecienc o processing submissions sent to

the BMA b the unds industr. This will assist Bermuda

to remain competitive as a world-class nancial

services centre, while at the same time maintaining the

integrit o our procedures or reviewing and analsing

submissions. The remaining investment companies willbe added into ERICA in earl 2012.

4. ANTI-MONEy LAUNDERING (AML)AML On-site Programme

As noted in the last issue o the Regulator Update,

the ocus o the Authorits AML on-site programme in

2011 has been on those institutions which hold trust or

investment business licences. To date, the Authorit has

conducted 17 on-site visits: nine at trust companies, ve

at investment companies, two at banks and one at a

mone service business. Preparations or the desk-basedreview programme the Authorit plans to conduct

in 2012 have commenced, with the development

o operational procedures and a statistical reporting

database or scoring compan submissions.

Trust Sector Guidance Notes ConsultationPeriod Complete, Comments Under Review

Consultation has ended on a drat set o Guidance

Notes designed to assist trustees in understanding and

compling with their AML obligations. The sector-

specic AML-guidance covers all AML regulations or

the trust sector, including the Bermuda Association o

Licensed Trustees. The Authorit is currentl reviewingcomments received rom the industr and will issue the

nal Guidance Notes in earl 2012.

Industry Seminars Successul OutreachRaises Market Awareness

To date in 2011, the AML unit has conducted si

outreach seminars: one at Buttereld with the

remainder in the trust and investment industries. The

purpose o the outreach seminars was to improve

AML awareness in the market and ocused on themes

that arose out o on-site visits. The AML Unit received

positive eedback rom the seminar participants. An

internal seminar was also held regarding ongoing

monitoring o the Trust sector. The Authorit is in the

process o preparing or a series o seminars to the

F a F Amiiraio ir.


7/20

05

Authority Attends the Annual Meeting othe Group o International Finance CentreSupervisors (GIFCS)

Marcia Woolridge-Allwood, Director, Banking, Trust &

Ieme aee he Aal Meeig of he GIFCs

ormerl the Oshore Group o Banking Supervisors

in Labuan, Malasia rom 20th to 23rd September

2011.

Major themes o discussion at the meeting ocused

on the jurisdictional impact o signicant global

developments in banking, investment and AML

regulation. Participants also discussed lessonslearned rom the nancial crisis. Highlights included:

implemeig Bael III; he Fiacial Acio tak

Force (FAtF) reiew of he 40 recommeaio i

preparation or the 4th round o mutual evaluations;

the impact o the G20 and other international

orgaiaio o GIFCs member; a Hege F

Regulation.

34th Plenary o Caribbean Financial ActionTask Force (CFATF)

Shauna MacKenzie, Director o Legal Services and

Eforceme aee he 34h Plear of CFAtF which

was held in Venezuela. The Plenar adopted a numbero changes to the governance o the organisation as

well as the adoption o a sanctions regime or member

states which are not responding in a satisactor

manner to ollow up reports. This regime mirrors the

approach ake b FAtF. I aiio o he Plear

meeting, there were two special working groups

held. One working group dealt with the review o the

chage o he FAtF 40 pl 9 recommeaio. the

eco workig grop ice he FAtF acio

regime a CFAtF approach.

Association o Certifed Anti-Money

Laundering Specialists (ACAMS) 10th AnnualInternational Money Laundering Conerence

During Q3 2011 members o the Authorits AML

unit attended the ACAMS 10th Annual International

Mone Laundering Conerence. The conerence

covered updates on international developments with

repreeaie from he us Feeral depoi Irace

Corporaio, Fiacial Crime Eforceme nework,

Feeral Reere, Ofce of he Comproller of he

Currenc and Egmont Group.

Authority Presents at InternationalAssociation o Insurance Supervisors(IAIS) workshop

William Kattan, Senior Advisor presented at the

International Association o Insurance Supervisors

(IAIS) workshop on the IAIS Multilateral Memorandum

of ueraig (MMOu) i vicoria Fall, Zimbabwe.

Along with other IAIS representatives, Mr. Kattan

presented to regional insurance supervisors on

international developments in supervisor cooperation

and inormation echange, as well as the IAIS MMOU

ramework and its accession and administration

procedures.

Regulation Presentations Support CaptiveMarket Outreach in Canada and US

Shelb Weldon, Director, Insurance Licensing and

Authorisation promoted Bermudas captive industr

at the Risk and Insurance Management Society

(RIMS) Canada Conerence held in Ottawa, Ontario

rom 18th to 21st September 2011.

A Bermuda Insurance Development Council

seminar was held rom 15th to 16th November 2011

in Toronto, Ontario. Mr. Weldon gave an educational

session about the Bermuda captive market and alsotook part on a panel that consisted o captive owners,

service providers and regulators.

Captive Live was held in Chicago, Illinois rom 26th

to 27th September 2011. Mr. Weldon participated

in interactive panel sessions, debated changing

regulations, networked with major plaers rom across

the US captive insurance market and met leading

advisors and service providers.

Mr. Weldon also participated in theAmerican Society

o Healthcare Risk Managementconerence held in

Phoeni, Arizona rom 16th to 19th October 2011. The

Conerence ocused on staing current with industrchanges and enhancing management skills, including

how to respond to a changing healthcare industr.

Authority Participates in Business BermudaFinancial Services Event

Leslie Robinson, Assistant Director, Insurance Licensing

& Authorisation presented at the Business Bermuda

Financial Services event in New york on 5th October

2011. Mrs. Robinsons discussions centred around the

International Outlook


8/20


legal and licensing requirements or insurance business

operations in Bermuda, including inormation on the

steps and requirements or incorporating in Bermuda;

regulator and licensing requirements; insurance

products; retirement products and mandated emploer

contributions and benets.

Authority Presents at IAIS AnnualConerence, Financial Stability InstituteRegional Seminar

In September 2011, Marcelo Ramella, Deput Director,

Polic, Research & International Aairs travelled to

Seoul, South Korea or the IAIS Annual Conerencewhere he made a presentation about the insurance

sectors response to natural disasters in particular the

Japanese earthquake.

In November 2011, Dr. Ramella took part in the

Fiacial sabili Iie (FsI) Regioal semiar for

Supervisors rom Arica on Strengthening Insurance

speriio a Promoig Fiacial sabili i

Mauritius. Dr. Ramella presented inormation on risk-

based regulation and supervision; macro prudential

approaches to surveillance and insurance supervision;

and on regulation and supervision o captive

(re)insurers, and gave training on macro prudential

supervision.


9/20

07

Market Analysis and Statistics

1. BERMUDA MONEy SUPPLy

The domestic mone suppl contracted during the quarter, declining b almost 1.5% when compared to the prior period, and

was 3.3% lower than the ear earlier (on an unconsolidated basis). The main driver o the quarter-on-quarter decrease was a

1.6% decline in deposit liabilities.

Bermuda Money Supply

(BD$ millions) 2011-Q3 2011-Q2 2011-Q1 2010-Q4 2010-Q3 2010-Q2

Notes & Coins in Circulation* 120 121 118 127 122 134

Deposit Liabilities 3,582 3,641 3,637 3,660 3,706 3,719

Total 3,702 3,762 3,755 3,787 3,828 3,853

Less: Cash at Banks and Deposit Companies** 56 62 62 65 60 73

BD$ Money Supply 3,646 3,700 3,693 3,722 3,768 3,780% Growth on Previous Period -1.46% 0.18% -0.78% -1.22% -0.32% -0.89%

Growth Year-on-Year -3.25% -2.13% -3.17% -4.73% -3.90% 0.18%

Totals may not add due to rounding.

* This table includes the supply o Bermuda dollars only. United States currency is also in circulation in Bermuda but theamount has not been quantied.

** Includes deposit companies as well as banks.

N.B. Note that the deposit liabilities or end-September 2010 have decreased b $19 million due to re-statement. This also

led to a downward revision o cash at banks and deposit companies b $1 million.


10/20


BD$ Deposit and Loan Profle Combined Banks and Deposit Companies (Unconsolidated


Deposit Liabilities 3,582 3,641 3,637 3,660 3,706 3,719

Less:Loans, Advances and Mortgages (5,268) (5,213) (5,230) (5,165) (5,146) (5,390)Surplus Deposits (1,686) (1,572) (1,593) (1,505) (1,440) (1,671)

Percentage o Deposit Liabilities Loaned 147.1% 143.2% 143.8% 141.1% 138.9% 144.9%


Following recent amalgamations within the sector, separate data or deposit companies are no longer published.

*Note that the deposit liabilities or end-September 2010 have decreased b $19 million due to re-statement during the last

quarter. This also led to a downward revision o cash at banks and deposit companies b $1 million.

The proportion o BD$ loans nanced b domestic currenc deposits increased to 147.1% during the last quarter (up rom

143.2% at end-June 2011), which is 5.9% higher than a ear ago (when it stood at 138.9%).

Local currenc lending (loans, advances and mortgages) increased b 1.1% (or $55 million) when compared to the prior quarter.

year-on-ear, lending was up b 2.4% (or $122 million).

BD$ deposit liabilities decreased b almost 1.6%, and as such, savings deposits now refect 41.2% o total BD$ deposit liabilities.

2. dOMEstIC And FOREIGn CuRREnCy POsItIOn

Foreign Currency Position - Combined Banks and Deposit Companies (Consolidated)


Net oreign currenc assets declined b 1.5% in the third quarter, but increased b 10.3% when compared to a ear earlier.

Similarl, net oreign currenc liabilities decreased b 0.7% during the quarter, but increased b 13.2% when compared to a ear

earlier. As a result, the net oreign currenc position continues to show a decit, which increased b $25 million to $120 million,

up 26.3% during the quarter. However, the decit decreased b 37.4% (or $108 million) when compared to a ear earlier.


Total Foreign Currency Assets 18,334 18,606 17,324 17,693 16,616 16,861

Less: Other Assets 220 361 391 428 437 433

Less: Foreign Currency Loans to Residents 847 837 896 1,013 1,052 1,219

Net Foreign Currency Assets 17,267 17,408 16,036 16,251 15,127 15,209

Foreign Currency Liabilities 17,189 17,303 16,128 16,232 15,163 15,749

Add: BD$ Deposits o Non-Residents 198 200 194 185 192 195

Net Foreign Currency Liabilities 17,387 17,503 16,321 16,418 15,355 15,944

Net Foreign Currency Position (Consolidated) (120) (95) (285) (166) (228) (735)


11/20

09

1300

1250

1200

1150

1100

1050

1000

3. BERMUDA STOCK ExCHANGE (BSx)The total market capitalisation o the BSx as at 30th September 2011 (ecluding unds) was $303 billion, down b $54.4

billion during the quarter. This decrease in total market capitalisation was primaril due to changes in the trading values o

several large international companies. The domestic market capitalisation totaled $1.66 billion, up b just $10 million rom the

previous quarter. Total trading volume in the third quarter was 5,449,904 shares with a corresponding domestic market value

o $15,728,836.

INDEX

30th

Septe

mber20

10

29th

Octob

er20

10

26th

Nove

mber20

10

31stDe

cembe

r201

0

28th

Janua

ry20

11

25th

Febru

ary2011

31stMa

rch20

11

29th

April

2011

27th

May2

011

30th

June2

011

27th

July2

011

26th

Augu

st20

11

30th

Septe

mber20

11

Source: Bermuda Stock Exchange


12/20


4. BANKING

Total assets within the banking sector declined b 0.9% (or $228.5 million) when compared to the prior quarter,

however, total assets still eceed the levels a ear earlier b $1.8 billion*. The sectors investment book rose b 0.6% (or

$39.5 million) while other assets ell b 13.3% (or $134.7 million) during the period.

Cash and deposits ell b 8.1% (or $650.5 million*) while the sectors loan book grew at a rate o 5.9% (or $517.1

million) during the quarter. The deposit base shrunk b 0.8% (or $163.1 million) when compared to the prior quarter,

though it was ahead b 10.2% (or $1.9 billion) in comparison to a ear earlier.

Shareholders equit or the sector declined b 2.3% (or $72.9 million) over the quarter.

Banking Sector Assets and Deposits

2011-Q3 2011-Q2 2011-Q1 2010-Q4 2010-Q3 2010-Q2

Total Assets ($ millions) 24,105 24,334 23,091 23,369 22,275 22,779

Quarterly Change (%) -0.9% 5.4% -1.2% 4.9% -2.2% 1.6%Total Deposits ($ millions) 20,531 20,694 19,531 19,631 18,632 19,124

Quarterly Change (%) -0.8% 6.0% -0.5% 5.4% -2.6% 3.6%

*Refer to Combined Balance Sheet of Bermuda Banks and Deposit Companies (consolidated) table.


13/20

11

Regulatory Capital to Risk Weighted AssetsThe banking sectors aggregate risk asset ratio improved during the quarter rom 21.9% to 23.2%. The corresponding

Tier 1 Risk Asset Ratio (RAR) also increased rom 23.4% to 25.0%.

The table below shows the movement in the over the last ve quarters:

0% 5% 10% 15% 20% 25% 30%

2010-Q3

2010-Q4

2011-Q1

2011-Q2

2011-Q3

25.6%

21.9%

25.0%

21.3%

23.2%


14/20


Combined Balance Sheet o Bermuda Banks and Deposit Companies (Consolidated)

Total

856,6606,5938,693

549511

23,091

8,0504,8886,593

19,531

420

19,951

3,141

23,091

BD$

415236

5,085435120

5,768

8381,4931,249

3,580

244

3,823

2,016

5,839

Other*

456,6086,5573,608

114391

17,324

7,2133,3955,344

15,951

176

16,128

1,125

17,252

(BD$ millions)

AssetsCashDepositsInvestmentsLoans & AdvancesPremises & Equipment**Other Assets**

Total AssetsLiabilitiesDemand DepositsSavingsTime Deposits

Sub Total - Deposits

Other Liabilities

Sub Total - Liabilities

Equity & Subordinated Debt

Total Liabilities and Capital

Total

806,4336,2568,423

548536

22,275

7,2794,7926,561

18,632

432

19,064

3,211

22,275

BD$

405328

5,005434

99

5,659

8421,4341,367

3,644

257

3,901

2,065

5,966

Other*

396,3806,2283,418

113437

16,616

6,4373,3575,194

14,988

175

15,163

1,146

16,308

Total

916,6336,2408,730

542544

22,779

8,0364,5806,509

19,124

534

19,658

3,121

22,779

BD$

523944

5,244428111

5,919

8571,4331,369

3,660

249

3,909

2,105

6,013

Other*

386,5946,1963,486

114433

16,861

7,1783,1475,140

15,465

285

15,749

1,017

16,766

2010-Q4 2010-Q3 2010-Q2

(BD$ millions)

AssetsCashDepositsInvestmentsLoans & AdvancesPremises & Equipment**Other Assets**

Total AssetsLiabilitiesDemand DepositsSavingsTime DepositsSub Total - Deposits

Other Liabilities

Sub Total - Liabilities

Equity & Subordinated Debt

Total Liabilities and Capital

Total

907,9446,5358,749

524492

24,334

8,8875,3136,493

20,694

431

21,124

3,210

24,334

BD$

414236

5,067411131

5,728

8751,5001,193

3,568

253

3,822

2,055

5,876

Other*

497,9026,4993,682

113361

18,606

8,0123,8135,300

17,125

177

17,303

1,155

18,458

Total

747,3096,5759,266

528353

24,105

8,6485,1176,765

20,531

438

20,969

3,137

24,105

BD$

392649

5,124401133

5,771

8701,4741,170

3,514

266

3,780

2,063

5,843

Other*

367,2836,5264,143

127220

18,334

7,7793,6445,595

17,017

172

17,189

1,073

18,262

Total

887,2026,3868,631

540522

23,369

8,1274,8136,690

19,631

547

20,178

3,191

23,369

BD$

475737

5,02741593

5,676

8211,4421,335

3,599

347

3,946

2,109

6,055

Other*

417,1456,3503,604

125428

17,693

7,3063,3715,355

16,032

200

16,232

1,082

17,314

2011-Q3 2011-Q2 2011-Q1

* Other includes USD and other currencies.** Premises and Equipment and Other Assets have been restated to reclassiy

equipment and other xed assets that were previously recorded under Other Assets.



15/20

13

5. InvEstMEnt Funds

The net asset value as at the end o Q3 was $160.44 billion, a decrease o 5.82% rom the $170.36 billion gure recorded at

the end o Q2.

In line with global trends, there was a broad-based decline in assets resulting rom Q3 perormance returns and net capital

outfows. The total number o unds was fat despite the negative environment, with 14 newl registered unds being

processed during the quarter.

2011-Q3 2011-Q2 2011-Q1 2010-Q4 2010-Q3 2010-Q2

Mutual Funds 613 616 650 657 656 661

Umbrella Funds 47 47 49 58 59 64

Sub-Funds 119 117 118 142 157 172

Segregated Account Companies 68 69 70 76 78 79

Segregated Accounts 209 212 245 248 215 229

Total 1,056 1,061 1,132 1,181 1,165 1,205

Unit Trusts 39 40 41 40 43 39

Umbrella Trusts 95 87 74 69 102 101

Sub-Trusts 155 154 150 150 166 175

Total 289 281 265 259 311 315

Total Portolios 1,345 1,342 1,397 1,440 1,476 1,520

Total Number o Funds 862 859 884 900 938 944

Total Net Asset Value (In billions) $160.44 $170.36 $171.97 $178.44 $175.59 $180.35

Note: The calculation of the Bermuda net asset value data has been revised and restated for 2010.


16/20


6. INSURANCEDuring the third quarter o 2011, 11 new insurers and intermediaries were registered in the Bermuda market. This compares

to seven registrations or the same period the previous ear.

Insurance Company Registration Statistics1

2011-Q3 2011-Q2 2011-Q1 2010-Q4 2010-Q3 2010-Q2

Class 1 0 5 0 3 0 1

Class 2 2 0 0 1 0 2

Class 3 1 3 2 0 2 0

Class 3A 0 4 1 1 0 0

Class 3B 0 0 0 1 0 0

Class 4 0 0 0 2 0 0

Long-Term 1 0 1 0 2 3

SPI 4 8 2 3 0 3

Dual Licence 0 0 1 0 0 0

Intermediaries 3 2 1 2 3 2

Total Additions 11 22 8 13 7 11

Explanatory Notes:

Class1 Single-parentcaptiveinsuringtherisksofi tsownersorafliatesoftheowners. Class2 (a)amulti-ownercaptiveinsuringtherisksofitsownersorafliatesoftheowners;or

(b) a single parent or multi-owner captive: (i) insuring the risks arising out o the business or operations othe owners or aliates, and/or (ii) deriving up to 20 percent o its net premiums rom unrelated risks.

Class3 Captiveinsurersunderwritingmorethan20%andlessthan50%unrelatedbusiness.

Class3A Smallcommercialinsurerswhosepercentageofunrelatedbusinessrepresents50%ormoreofnetpremiumswritten or loss and loss expense provisions and where the unrelated business net premiums are less than $50million.

Class3B Largecommercialinsurerswhosepercentageofunrelatedbusinessrepresents50%ormoreofnetpremiumswritten or loss and loss expense provisions and where the unrelated business net premiums are more than$50 million.

Class4 Insurersandreinsurerscapitalisedataminimumof$100millionunderwritingdirectexcessliabilityand/orproperty catastrophe reinsurance risk.

Long-Term Insurerswritinglong-term(orlife)business.

SPI Aspecialpurpose,singletransactionorsinglecustomerinsurancecompanywhichassumes(re)insurancerisks,and which typically ully unds its exposure to such risks through the proceeds o a debt issuance or someother nancing mechanism, where the repayment rights o the providers o such debt or other nancingmechanism are subordinated to the (re)insurance obligations o that vehicle.

DualLicence Insurerswritingacombinationoflong-term(orlife)businessandClass1,2,3,3A,3Bor4business.

Intermediaries Insurancemanagers,insurancebrokers,insuranceagentsandinsurancesalesmen,asdenedinSection10ofthe Insurance Act 1978.

1 Eective Q1 2010, the presentation o this statistical data has been revised to provide details o those companies added to the Insurance Register during eachquarter, i.e. those that have been granted an insurance licence by the Bermuda Monetary Authority. Previously, statistics or company incorporations wereprovided in this publication. Company incorporations are completed by the Bermuda Registrar o Companies (ROC) ofce; statistics on insurance companyincorporations will now be available rom the ROC.


17/20

15

7. COMPANy AUTHORISATIONS

Companies, Partnerships and Permits Statistics - Applications Approved

2011-Q3 2011-Q2 2011-Q1 2010-Q4 2010-Q3 2010-Q2

Exempted Companies 238 236 226 256 188 183

(Bermuda companies exempted rom the 60%

Bermudian ownership requirement)

Exempted Partnerships 12 14 15 24 5 18

(partnerships established in Bermuda to carry on

business in or rom within Bermuda)

Overseas Partnerships 5 1 1 2 1 1

(overseas partnerships applying or permits to

carry on business in or rom within Bermuda)

Overseas Permit Companies 4 6 2 15 7 7

(overseas companies applying or permits to

carry on business in or rom within Bermuda)

Unit Trusts 6 15 5 2 6 8

Total Applications Approved* 265 272 249 299 207 217

The statistics shown above refect the number o applications that have received vetting clearance rom the Bermuda

Monetary Authority. These gures do not refect the actual number o entities incorporated in Bermuda during the

period. Such statistics can be obtained rom the Registrar o Companies.

* Quarterly Numbers are amended to refect more up-to-date consent inormation.


18/20

Regulatory Update January 2012


19/20


20/20

BERMUDA MONETARY AUTHORITY

BMA Housen43 Victoria Street nHamilton HM 12 Bermuda

P.O. Box HM 2447 nHamilton HM JX Bermuda

tel: (441) 295 5278 nax: (441) 292 7471

email: [email protected] nwebsite: www.bma.bm

Documents

829-January 2012 Regulatory Update (FINAL)