Mr Speaker, in accordance with section 28 of the Bermuda Monetary Authority Act 1969, earlier today in this Honourable House I tabled the 2024 Annual Report of the Bermuda Monetary Authority (the “Report”).
Mr Speaker, Bermuda’s financial services sector is subject to the regulation and supervision of the Bermuda Monetary Authority (Authority or BMA). The Authority operates pursuant to the Bermuda Monetary Authority Act 1969 (the “Act”), which provides it with a number of principal objects, including the supervision, regulation and inspection of financial institutions operating in or from within Bermuda, together with the promotion of financial stability and soundness of financial institutions.
Mr Speaker, Honourable members would be aware that the Authority has specific licensing and supervisory responsibilities under the following regulatory statutes: the Banks and Deposit Companies Act; the Corporate Service Provider Business Act; the Digital Asset Business Act; the Insurance Act; the Investment Business Act; the Investment Funds Act; the Money Service Business Act; the Fund Administration Provider Business Act ; the Trusts (Regulation of Trust Business) Act, together with other statutes. The Authority also regulates the Bermuda Stock Exchange.
The Authority’s mission is to contribute to Bermuda’s financial stability, protect customers of financial services and protect Bermuda’s currency through maintaining effective and proactive regulatory frameworks through its highly skilled and engaged workforce; delivering efficient operations and sustainable business practices; and supporting responsible innovation locally and in global markets.
International Recognition
Mr Speaker, the Authority has received international recognition for its for its regulatory excellence, being one of only seven jurisdictions with US National Association of Insurance Commissioners (NAIC) “qualified jurisdiction” status, one of three with NAIC “reciprocal jurisdiction” status, and one of just two jurisdictions in the world to be granted full Solvency II equivalence by the European Union.
Mr Speaker, the Authority is an active and respected participant in key international regulatory bodies, fostering strong global relationships. The Authority’s Managing Director of Supervision serves on the International Association of Insurance Supervisors (IAIS) Executive Committee, with BMA staff leading or contributing to numerous IAIS committees, including those on macroprudential policy, development, and financial crime. The Authority also engages with the Financial Stability Board, the Bank for International Settlements, the Organisation for Economic Co-operation and Development’s Insurance and Private Pensions Committee. The Authority is also a coordination group member of the Global Financial Innovation Network, a group of regulators committed to supporting financial innovation in the best interests of consumers.
Legislation
Mr Speaker, the Authority is authorised to advise the Minister of Finance on policy matters relating to financial institutions and may propose legislation consistent with its responsibilities under the Bermuda Monetary Authority Act 1969. Amongst the legislative proposals advanced in 2024 were those which bolstered the regime under which recognised investment exchanges and clearing houses are supervised and regulated; a Ministerial Order for the minimum initial net assets required of Restricted Banks at the time of licensing and expanded the classes of persons to whom such banks may provide services; and measures to amend the fees payable by entities operating within the Authority’s innovation hub.
Additionally, rules were passed regarding the requirements for insurers to create a recovery plan, the contents of such plans, and the matters which the Authority shall consider when determining which insurers need to prepare a recovery plan. Regulations were also issued to enable the Authority to refresh the form and design of coins to feature the image of His Majesty King Charles III.
Financial Sector Highlights
Mr Speaker, Members’ attention is drawn to the following key highlights for the various sectors supervised by the Authority:
Banking Sector
With regard to the banking sector, consolidated assets remained unchanged at $23.7 billion in 2024. Investments retained the largest share of total assets at 53%, followed by loans at 33%, and cash and deposits at 11%. Net interest income continued to be the largest component of the banking sector’s income at $755 million down from $790 million in 2023.
Insurance Sector
Mr Speaker, moving to the insurance sector, 1,239 insurers were registered as of 31 December 2024 compared to 1,213 in 2023. According to 2023 year-end information, total capital and surplus was $404 billion in 2023 an increase of $57 billion from the $347 billion recorded in 2022.
Gross premiums written were $316 billion in 2023 an increase of $39 billion from the $277 billion recorded in 2022. This increase is attributed to the growth in business written by large, commercial, general business and long-term insurers. Total assets were $1.87 trillion in 2023 an increase of $217 billion from the $1.65 trillion recorded in 2022. This increase was largely due to increased business written by a specific group of insurers.
Investment Sector
Mr Speaker, moving to the investment sector, there were 52 licensed investment business providers, an increase of 5 from 47 in 2023; and 56 registered investment business providers operating in Bermuda during 2024. The aggregate total assets under management (AUM) reported by licensed investment providers were $231 billion compared to $225 billion AUM in 2023. Total assets under administration (AUA) for 2024 were $25.4 billion, compared to $28.1 billion reported for 2023.
Mr Speaker, in 2024, there were 784 investment funds on the Investment Funds Act register, a decrease of 20 compared to 804 in 2023. Of these funds, 129 overseas funds being promoted in Bermuda and 655 Bermuda funds. This is contrasted against 2023, whereby 146 overseas funds were promoted in Bermuda and Bermuda funds totalled 658, with a net asset value reported in relation to Bermuda funds of $295 billion an increase from $281 billion in 2023. At the end of 2024, 24 fund administrator licences were in issue, unchanged from the prior year, with $195.6 billion in assets under administration.
Digital Asset Business Sector
Mr Speaker, 2024 was a significant year of growth for the digital asset business sector which ended the year with 36 digital asset business providers operating in Bermuda, a 50% increase from the 24 recorded in 2023. This sector is continuing to demonstrate strong growth and is expected to become the third largest revenue earner for the Authority during the upcoming year. This growth is a testament to this Government’s foresight in ensuring that Bermuda established a credible regime for this emerging sector, which has been in place since 2018.
Bermuda Stock Exchange
Mr Speaker, the total equity market capitalisation of the Bermuda Stock Exchange stood at $217.6 billion at the end of 2024 as compared with $191.7 billion at the end of 2023. A total of 156 new insurance-linked securities were added to the BSX in 2024 a reduction from 195 new issues recorded in 2023. Domestic trading volume totalled 11.3 million shares in 2024 up significantly from 2.3 million in 2023; with the value of shares traded increasing 5-fold from the prior year, totalling $105.8 million compared to $20.4 million in 2023.
BMA 2024 Financial Highlights
Mr Speaker, honourable members’ attention is drawn to the following highlights set out in the Statement of Accounts Report:
Net income for the Authority was $17.93 million up from a net loss of $3.53 million in the previous year.
Total revenue increased by 50% up to $129.8 million, up from $86.7 million. The increase is mainly due to a $40 million increase in revenue from supervisory and licensing fees.
Expenses increased by 24% to $111.9 million. The increase was mainly due to the $15.5 million in increased salaries and benefits.
Licensing fees were $114.5 million, compared to $74.4 million from the prior year, of which $103 million was paid by the insurance sector.
The receipt of funds from fines and penalties increased by $2.554 million from the previous year.
The Authority had 302 full-time permanent employees an increase from 273 in 2023.
Board Members are paid an annual fee of $50,000 an increase from $26,000 in 2023; Board Sub Committee Chairs are paid an annual fee of $58,000 to $63,000, up from $33,000 in 2023. The Chairman of the Board receives an annual fee of $125,000 an increase from $96,000 in 2023.
The CEO’s salary is set at $550,000 up from $500,000 in 2023, and he is eligible for a performance-based bonus of up to 50% of base salary. The salaries of the other 20 members of the executive team range from $275,000 to $500,000, with a performance-based bonus of up to 37% of salary.
Mr Speaker, upon reviewing the Authority’s 2024 financial statements, the Auditor General has issued a clean opinion.
Mr Speaker, on behalf of the Government, I wish to express sincere appreciation to the Authority’s Board, chaired by former Cabinet Secretary Mr Donald Scott. I also wish to extend special thanks to the executive team and dedicated staff of the Bermuda Monetary Authority, under the leadership of Chief Executive Officer Mr Craig Swan. The Board and executive team deserve honourable members’ congratulations for their sound stewardship and the excellent financial results achieved in 2024. As Minister of Finance, I am especially grateful for the continued partnership and collaboration with the Authority’s leadership, as this Government remains focused on expanding and strengthening Bermuda’s financial services sector in a globally competitive environment.
Thank you, Mr Speaker.