In an effort to cover the costs of raising supervisory standards, the Insurance Companies (Special Fees) Act will impose an one-off $230,000 levy on certain Class 4 insurance companies in Bermuda. It is estimated that 37 Class 4 insurers will have to pay the levy which is intended to infuse the Bermuda Monetary Authority with additional funds needed to draft and prepare regulations required under Bermuda’s Insurance Solvency Framework, also known as the Solvency II Roadmap.
Finance Minister Paula Cox said that the $230,000 fee will apply to companies with a gross premium of $1.2 billion or more in 2009 and that a sliding scale would be applied to other companies. These fees will be due by the end of September and a 10% per month fine will be imposed on any company that fails to pay its fee. The Finance Minister gave assurances that the affected insurers were consulted on the initiative. The legislation was supported generally by the Bermuda based reinsurers and both opposition parties in the Bermuda legislature endorsed the bill.