Bermuda Monetary Authority Delays Parametric Insurer Class Introduction
What happened
The Bermuda Monetary Authority is drafting amendments to the Insurance Act 1978 to create a new Parametric Special Purpose Insurer class. This new class, designed for fully-collateralized parametric risk, is now targeted for introduction in the fourth quarter, later than the original second-quarter goal.
From royalgazette.com
Why it matters
The new framework provides a dedicated structure for re/insurers writing parametric business, which pays out when a specific trigger, such as wind speed, is reached. This mechanism is intended to help governments and individual policyholders rebuild more quickly following a disaster.
A warning has been issued regarding the need for vigilance due to global financial flows involving Bermuda and an International Financial Centre.
From royalgazette.com
Who's involved
- BermudaThe Bermuda Monetary Authority is the regulator drafting the new insurer class for parametric risk.
- World BankThe World Bank was involved in a past catastrophe bond payout triggered by Hurricane Melissa.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Brookfield Asset ManagementSpeculative
Brookfield Asset Management, which has a subsidiary domiciled in Bermuda, might adjust its contracts or investment strategies related to parametric risk.
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The entities involved
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Bermuda
British overseas territory in the North Atlantic Ocean
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World Bank
international financial institution