Bermuda: Crossroads for Takaful Opportunities

Kerri L. Lefebvre, Claire McConway • Posted 31/12/2010 • Under Articles

Bermuda is positioned to play a key role in the swiftly growing Islamic insurance, or takaful, industry. Lying some 660 miles east of the North American coastline and settled by shipwrecked British sailors on their way to Virginia in 1609, Bermuda’s size and location belies its status as a leading risk capital.

Bermuda has a sophisticated legal system rooted in English law. Its success as an insurance centre is largely attributable to its effective regulatory system, overseen by the Bermuda Monetary Authority (BMA). Cooperative interaction between industry and the BMA has resulted in a regulatory framework that is innovative, responsive and transparent. This regime, combined with a deep pool of insurance expertise, allows Bermuda to keep pace with global developments in the marketplace.

In widely reported comments made at the Bahrain/Bermuda Conference on Global Financial and Insurance Services in July 2010, now Premier Paula Cox said that Bermuda’s Government and private sector are actively involved in promoting the development of Islamic finance in Bermuda, and would welcome the development of takaful. By tapping into Bermuda’s resources, takaful and retakaful operators should be able to leverage access to capital as well as systems, products and expertise. This note considers how takaful and retakaful operations might be structured in Bermuda.