Bermuda: Bermuda Creates Legislative Framework To Promote Insurtech Innovation

Last Updated: 24 August 2018
Article by Christopher Garrod, William Cooper and Jacqueline King

Bermuda has recently introduced a new legislative framework for establishing insurers and insurance intermediaries that carry on business in an "innovative or experimental manner". The Insurance Amendment Act, 2018 (the "Amendment Act"), which came into effect on 23 July 2018, amends the Insurance Act, 1978 (the "Act"). It creates an insurtech 'regulatory sandbox' for the purpose of facilitating and promoting experimental and innovative applications of technology in the insurance sector in a controlled environment. The sandbox is complemented by the Innovation Hub that the Bermuda Monetary Authority (the "BMA") has established to promote insurtech innovation.

New classes of insurers

The Amendment Act creates two new classifications for Innovative Insurers: Class IGB (an insurer carrying on general business in an innovative or experimental manner) and Class ILT (an insurer carrying on long-term business in an innovative or experimental manner). There are also new classifications for Innovative Intermediaries: insurance agents ("IAs"), insurance brokers ("IBs") and insurance managers ("IMs") carrying on their respective business in an innovative or experimental manner.

The 'sandbox': a controlled-risk space

Innovative Insurers and Innovative Intermediaries may be formed as new start-ups or affiliates of existing insurers (or intermediaries) and operate in a closely controlled environment in the sandbox. For a limited period (typically six months to one year, which may be extended), these companies will operate using and experimenting with their proposed new technologies under the scrutiny of the BMA. This will allow Innovative Insurers and Innovative Intermediaries to provide their insurance products and services to clients in a controlled-risk space, with the BMA determining what legal and regulatory aspects of existing legislation should apply to them in order to ensure policyholder protection. The intention is that within or following the initial period of controlled development, an entity could graduate from the sandbox and become a fully licenced insurer or intermediary. At that stage, the entity would apply to be registered under the Act as a Class 1, 2, 3, 3A, 3B or 4 insurer (if general business), Class A, B, C, D or E insurer (if long-term business), Special Purpose Insurer, insurance agent, insurance broker, or insurance manager, as appropriate.

The application process

The initial application process for registering as an Innovative Insurer or Innovative Intermediary is similar to the existing application process for registering as an insurer or intermediary under the Act and many of the same standards and requirements apply. However, in considering whether to register a body as an Innovative Insurer, the BMA will also have regard to (a) whether the Innovative Insurer has satisfactorily demonstrated to the BMA that it is able to use new or different technological or innovative measures to carry out the proposed innovative insurance business or to provide products or services, and (b) the sophistication of the policyholders, proposed policyholders and service providers of the Innovative Insurer.

Where the BMA approves an application, it will advise the Innovative Insurer or Innovative Intermediary of the legislative and regulatory requirements that will apply while the company is in the sandbox. The BMA has indicated that it may consider modifying certain requirements, including capital requirements, the appointment of a BMA-approved auditor, the appointment of a loss reserve specialist (in the case of a Class IGB insurer) or actuary (in the case of a Class ILT insurer), prudential filings, fees, and minimum paid-up share capital. Otherwise, the legal and regulatory requirements for Class IGB insurers and Class ILT insurers are comparable to those for Class 1 insurers and Class A insurers, respectively. Likewise, the legal and regulatory requirements for IAs, IBs and IMs are similar to those for insurance agents, insurance brokers and insurance managers, respectively. While in the sandbox, the company will be assigned a principal contact at the BMA to assist the company through the process.

The Amendment Act also provides for the BMA to make prudential standard rules to be complied with by Innovative Insurers or Innovative Intermediaries, where required. To date, the BMA has yet to issue such rules.

Innovation Hub

The "Innovation Hub" was designed by the BMA to attract companies which are part of the broader insurance digital transformation process occurring globally. The BMA has developed an internal working group which is designed to meet and greet any companies within the insurtech space – branded as the BMA's insurance innovative working group or "BMA IWG". This group is meant to encourage the exchange of ideas and information with insurtech companies, and it also has a mandate to allow companies to enter the insurtech regulatory sandbox when they are ready to do so.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
BeesMont Law Limited
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
BeesMont Law Limited
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions