Bermuda’s Regulatory Leadership in Captive Insurance and Digital Assets
A Strategic Overview
Bermuda is one of the top destinations for captive insurance and digital assets, thanks to its progressive regulations. This article explores the latest trends in both sectors and what they mean for businesses already active in—or looking to enter—these markets.
Captive Insurance
As the world’s second-largest hub for captive insurance—home to 10.6% of global captives—Bermuda remains a go-to for companies prioritizing stability and adaptability. In 2024, the Bermuda Monetary Authority (BMA) granted licenses to 10 captive insurers, signaling strong confidence in the island’s well-established regulatory system and the expanding role in the global captive insurance market.
Bermuda’s Solvency II equivalence further boosts its global appeal, simplifying international transactions while keeping regulations agile. Notably, at the 2024 Bermuda Captive Conference, Timae Flood, Deputy Director of Insurance Supervision, clarified that Bermuda’s captive insurance entities are not subject to the equivalent provisions of the Solvency II directive. As such, existing captive classifications remain unaffected by the jurisdiction’s Solvency II equivalence. Let’s look into additional recent key Regulatory Developments:
1. Segregated Account Governance:
In July 2024, the BMA updated guidelines for segregated accounts, emphasizing transparency and stronger protections for policyholders (BMA, 2024).
2. Recovery and Resolution Plans:
Effective May 2025, all captives are required to submit recovery and resolution plans to enhance systemic resilience and ensure business continuity
3. IFRS 17 Compliance:
Effective 26 February 2025, updates to Bermuda’s Insurance Account Rules will align with IFRS 17, streamlining financial reporting and data consistency. This amendment highlights the BMA’s commitment to modernising regulatory standards and supporting the insurance industry’s transition to IFRS 17 compliance.
Digital Assets
The Digital Asset Business Act (DABA), enacted in 2018, established Bermuda as a pioneer in digital asset regulation. The regime covers licence applications, custody and asset protection, anti-money laundering (AML) compliance, financial recording requirements and prudential standards, with ongoing updates that reflect the dynamic nature of the sector. Recent developments include:
Recent Updates:
Stablecoin Governance (May 2024):
Guidance outlines requirements for governance, reserve backing, and risk controls for stablecoin issuers—an area of growing interest for insurers seeking tokenized asset solutions.
Custody Rules (2024):
Digital Asset Business (Custody of Client Assets) Rules provide enhanced safeguards for client assets, reinforcing the security of blockchain-enabled financial products.
Stronger Enforcement Measures:
Non-compliance with DABA provisions can now result in penalties of up to USD 10 million or imprisonment, underscoring the BMA’s strong enforcement stance and commitment to maintaining market integrity.
Bermuda’s Strategic Advantages
Global Collaboration
Bermuda’s strong reputation for fair rules comes from following international guidelines. Renewed Solvency II equivalence, IAIS membership, and the 2024 Lloyd’s Memorandum of Understanding (MoU) ensure its standards harmonize with global best practices. These partnerships foster cross-border innovation while maintaining rigorous oversight.
Trusted Oversight: The island’s enforcement system protects fair and transparent markets without holding back development and innovation. This equilibrium attracts investors seeking stability in high-growth sectors like digital assets.
Financial Reporting Flexibility: Bermuda’s accounting framework offers a unique advantage: entities may adopt any globally recognized standard, including IFRS, U.S., UK, Canadian, or BMA-approved GAAP (Conveys, 2023)
Businesses in Bermuda can choose from major global accounting standards, simplifying compliance for multinationals. This flexibility allows multinational organizations to align financial reporting with parent company practices or investor expectations, reducing compliance complexity and costs.
Public-Private Synergy
At the 2025 Consensus conference, Premier David Burt highlighted Bermuda’s goal to lead in digital finance, stressing partnerships with industry players to refine laws like DABA (Government of Bermuda, 2025). PKF actively contributes to this effort, participating to help shape pragmatic regulations.
“We aim to be at the forefront of innovation while maintaining regulatory integrity.” — Premier Burt.
Conclusion
Bermuda’s leadership in captive insurance and digital assets stems from its adaptive regulation, financial reporting flexibility, and public-private collaboration. For organizations operating in these sectors, aligning with BMA standards is critical to leveraging growth opportunities.
PKF’s audit services provide the assurance needed to navigate this dynamic environment, combining technical rigor with deep regulatory insight.
Contact PKF Bermuda for specialized guidance on regulatory audits, compliance strategy, and risk management solutions.
You can always get to know more when you contact us at : bermuda@pkfantares.com