BMA’s enhanced disclosure rules: strengthening insurer transparency through ERM governance

The Bermuda Monetary Authority (BMA) is raising the bar on transparency and governance with proposed disclosure requirements for long-term insurers. These measures aim to provide greater visibility into asset and liability exposures, strengthen stakeholder confidence and enhance market discipline.  

For insurers, this marks a pivotal shift from regulatory reporting to strategic communication — where enterprise risk management (ERM) and governance are key to demonstrating resilience and trust.

A new standard for transparency  

The BMA’s proposals require long-term insurers to publicly disclose detailed information on their investment portfolios and liability profiles.  

Key features include:

• Asset-level disclosures using CUSIP or position-level identifiers, covering equities, fixed income, mortgage loans, derivatives, and alternative investments.
• Affiliated asset transparency, addressing governance risks and potential conflicts of interest.
• Liability disclosures at the product-type level, including currency, reserve amounts, reinsurance recoverables, and effective duration metrics. 
• Annual reporting via a standardized template integrated with existing regulatory returns.

These disclosures are designed to provide stakeholders with a comprehensive view of insurers’ balance sheets, enabling better assessment of financial soundness, risk exposure, and asset-liability alignment.

Benchmarking against best practices 

The BMA’s approach mirrors several principles embedded in the National Association of Insurance Commissioners’ (NAIC) Own Risk and Solvency Assessment (ORSA) and investment reporting frameworks.

For example: 

• Granular asset disclosures are consistent with NAIC’s Schedule D and E reporting. 
• ALM insights reflect the NAIC’s emphasis on stress testing and scenario analysis. 
• Governance of affiliated assets aligns with NAIC’s focus on transparency and risk mitigation in related-party transactions.

By benchmarking against NAIC standards, the BMA ensures Bermuda remains competitive while maintaining regulatory rigor.

ERM as the backbone of resilient disclosure 

Beyond compliance, the enhanced disclosure regime reinforces the importance of robust ERM governance.  

Insurers are expected to:

• Demonstrate the appropriateness of their investment strategies in relation to liability profiles. 
• Provide qualitative assessments of liquidity, stress testing, and risk management practices. 
• Integrate disclosure with strategic decision-making, ensuring alignment with policyholder obligations under both normal and stressed conditions.

This shift from static reporting to dynamic risk insight marks a pivotal evolution in regulatory expectations.  

Navigating Operational Challenges

While the industry has broadly welcomed the BMA’s proposals, stakeholders have raised concerns about the operational burden of populating detailed templates, especially for entities with immaterial or run-off business.  

Additional concerns include competitive sensitivities in jurisdictions with less granular disclosure norms and the risk of misinterpretation by non-expert users.

In response, the BMA has emphasized that requests for modified disclosures will only be considered in exceptional circumstances. Specifically, an uneven playing field alone is not sufficient to qualify an insurer for a waiver from filing the requisite assets and liabilities.  

Insurers must provide compelling justification demonstrating that the nature of the disclosure would materially disadvantage them in their jurisdiction. Even then, the BMA will only consider modifying, not waiving, the publication requirements.

To ease the operational burden, the Authority has designed the disclosure template to leverage existing regulatory returns, such as the Lapse and Liquidity Return and the Bermuda Solvency and Capital Return. Liability data is expected to be readily available through GAAP-based financial statements. The BMA has also committed to engaging directly with run-off entities that believe the preparation of public disclosure documents could erode policyholder value.

Preparing for disclosure success

To meet the BMA’s enhanced expectations, insurers should assess readiness in four key areas:

• Data integrity: ensure investment and liability data are accurate, traceable and auditable
• Governance oversight: involve boards and risk committees in validating disclosure accuracy and narrative context
• ERM integration: embed disclosure metrics into wider risk management, capital planning and ORSA processes
• Stakeholder communication: develop clear explanations to accompany published data and reduce potential misinterpretation

Early, structured preparation will simplify compliance and position firms as leaders in transparency and governance.

Looking ahead

As the BMA prepares to finalize its rules and guidance, insurers must proactively strengthen their disclosure capabilities. The new regime is not just a regulatory requirement, it is a strategic opportunity to build trust, demonstrate resilience, and lead in transparency.

At Grant Thornton Bermuda, we are committed to supporting our clients and partners in navigating this transition. Through thoughtful governance, integrated risk management, and clear communication, we can turn disclosure into a competitive advantage.