Bermuda Updates Guidance For Insurers

The Bermuda Monetary Authority, which regulates Beremuda’s financial industry, is updating its guidance on managing climate risk for commercial insurers. It has issued a guidance note with the goal of ensuring financial soundness in the insurance sector, and its contribution to an orderly transition to a net-zero economy. The Authority acknowledges that risks associated with climate change are evolving and that risk management must evolve as well. It asks insurers to comply with general principles espoused earlier on a best-efforts basis. The new guidance includes a section on “Materiality Assessments and Double Materiality.” The Authority calls that the starting point for analyzing exposure to climate change risks for commercial insurers and insurance groups. It expects them to outline ESG risk priorities for 2023, and an action plan going forward that discusses policies, procedures, and governance by the board of directors and senior executives. The action plans are to be fully operational on or before the end of 2025.