How to Incorporate an Insurance Company in Bermuda: Complete Guide 2026

Last verified: April 2026

This guide is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult a qualified professional for your specific situation.

Key Takeaways

• Bermuda is a world-leading jurisdiction for insurance and reinsurance, regulated by the Bermuda Monetary Authority (BMA).
• The incorporation process involves selecting service providers, reserving a name, and submitting detailed applications to both the Registrar of Companies and the BMA.
• Bermuda offers various insurance license classes, from single-parent captives (Class 1) to large commercial insurers, each with specific capital and surplus requirements.
• While offering a sophisticated regulatory environment and tax neutrality, incorporating in Bermuda involves significant costs and stringent corporate governance standards.
• The BMA has recently updated its licensing process for insurers, as of January 2026, to provide greater clarity and consistency.
• The Insurance Amendment No 2 Act 2025, which became operative on 7 January 2026, has brought changes to Bermuda's group supervision regime.

An Introduction to Bermuda's Premier Insurance Market

Bermuda has established itself as a global powerhouse in the insurance and reinsurance industry, standing as the world's third-largest reinsurance center. [1] Its reputation is built on a foundation of regulatory excellence, a sophisticated legal framework, and a deep pool of industry talent. For decades, multinational corporations and financial institutions have chosen to incorporate an insurance company in Bermuda to manage complex risks, from captive insurance arrangements to large-scale commercial underwriting. The jurisdiction's regulator, the Bermuda Monetary Authority (BMA), is internationally recognized for its robust, yet commercially sensible, approach to supervision, aligning with global standards while fostering innovation. [2]

This guide provides a comprehensive overview of the process, requirements, and strategic considerations for incorporating an insurance entity in this premier international financial center. We at Incorporator.io will explore the different types of Bermuda insurance company structures, the step-by-step formation process, capital requirements, and the ongoing responsibilities of operating within this highly respected regulatory environment.

The Regulatory Framework: Understanding the Bermuda Monetary Authority (BMA)

The BMA is the integrated regulator of Bermuda's financial services sector, including the insurance and reinsurance industry. Established under the Bermuda Monetary Authority Act 1969, the BMA is responsible for the licensing, supervision, and regulation of all insurance entities operating in and from the jurisdiction. Its regulatory approach is risk-based, focusing on ensuring the financial soundness of insurers and protecting the interests of policyholders. [2]

The BMA's oversight is comprehensive, covering aspects from initial licensing and solvency requirements to corporate governance and market conduct. The Authority works to maintain Bermuda's compliance with international standards, such as those set by the International Association of Insurance Supervisors (IAIS), which has contributed to Bermuda achieving Solvency II equivalence from the European Union. This equivalence allows Bermuda-based (re)insurance groups to compete in Europe on equal footing, a significant factor in its attractiveness as a Bermuda reinsurance hub. All applications and regulatory interactions are increasingly handled through the BMA's online portal. [3]

Types of Insurance Licenses in Bermuda

Bermuda offers a tiered system of insurance licenses, allowing for a wide range of insurance activities, from small captive operations to large, complex commercial insurers. The BMA classifies these licenses based on the nature and scale of the business to be written. Understanding these classifications is the first step to determining the appropriate structure for your Bermuda captive insurance or commercial entity. [2]

The primary categories for general business are Class 1, Class 2, Class 3 (further subdivided into 3A, 3B), and Class 4. These classifications are designed to match the level of regulatory oversight with the risk profile of the insurer.

Comparison of Key Insurance License Classes

In addition to these general business classes, Bermuda has specific licenses for Long-Term (life) insurers (Class A, B, C, D, and E) and special purpose vehicles used for insurance-linked securities (ILS) transactions. [2]

Step-by-Step Guide to Incorporating Your Insurance Company

The process to incorporate an insurance company in Bermuda is a structured and multi-stage affair, requiring coordination between your chosen professional advisors, the Registrar of Companies (ROC), and the BMA. While the timeline can be condensed for urgent applications, a typical incorporation process takes approximately three to four weeks from the initial application to the final issuance of a license. [3]

Here is a breakdown of the critical steps involved:

1. Appoint Professional Service Providers: The first and most crucial step is to engage a team of Bermuda-based professionals. This will include a law firm to handle the legal aspects of incorporation, an audit firm, an insurance manager to provide management services and a principal representative, and a bank. These providers will guide you through the entire process.

2. Name Reservation: You must reserve the proposed name for your insurance company with the ROC. It is standard practice to submit a primary name and at least two alternatives. The name cannot be too similar to an existing company in Bermuda. Once approved, the name is reserved for a period of six months. [3]

3. Pre-incorporation Application to the BMA: Before the company can be formally incorporated, a pre-incorporation application must be submitted to the BMA. This is done through the BMA's online portal. The application includes detailed information about the proposed company, its ownership structure, and the business plan. It also requires the submission of personal declarations from the proposed directors and officers. [3]

4. Submission to the Registrar of Companies: Once the BMA has reviewed the pre-incorporation application and issued a letter of 'no objection', the formal application for incorporation can be made to the ROC. This includes filing the Memorandum of Association for the company.

5. Licensing Application with the BMA: Following the legal incorporation of the company, a formal application for an insurance license must be submitted to the BMA's Assessment and Licensing Committee. This application includes the final, detailed business plan, five-year financial projections, and evidence that the company has been capitalized in accordance with the requirements for its proposed license class. [1]

6. Issuance of Insurance License: Upon successful review of the licensing application, the BMA will issue the formal insurance license. Only at this point is the company legally permitted to commence its insurance business activities.

Costs & Fees

Incorporating and operating an insurance company in Bermuda involves significant financial commitment. The costs can be broadly divided into initial setup costs and ongoing operational expenses. While Bermuda is a low-tax jurisdiction with no corporate income tax, the fees for professional services, government licensing, and regulatory compliance are substantial.

Tax Overview

Bermuda currently has no corporate income tax, profits tax, or withholding taxes. This tax-neutral environment is a primary attraction for international businesses. However, companies must still pay annual government fees. [3]

Banking & Financial Infrastructure

Bermuda has a sophisticated banking and financial infrastructure, with a number of international banks operating on the island. Opening a corporate bank account is a key step in the incorporation process, and your chosen service providers can assist with this.

Compliance & Ongoing Requirements

A Bermuda-based insurance company must adhere to stringent corporate governance standards. The BMA places a strong emphasis on ensuring that companies are well-managed and that the interests of policyholders are protected. This includes requirements for a board of directors with appropriate experience and expertise, as well as the appointment of key roles. [2]

Every insurer must appoint a Principal Representative in Bermuda. This role is typically filled by the insurance manager and serves as the primary point of contact between the company and the BMA. The insurer must also appoint an approved independent auditor who will annually audit the company's statutory financial statements. [2]

Ongoing compliance involves regular financial reporting to the BMA. All insurers are required to file an annual Statutory Financial Return, which includes a detailed breakdown of the company's financial position. The level of reporting and the complexity of the solvency calculations depend on the license class, with higher-class insurers subject to more rigorous requirements, including the Bermuda Solvency Capital Requirement (BSCR) model. [2]

Pros and Cons of Incorporating an Insurance Company in Bermuda

FAQ

Q: How long does it take to incorporate an insurance company in Bermuda?

A: The process typically takes between three to four weeks, assuming all application materials are in order and there are no complex issues to resolve. In urgent cases, the timeline can be expedited. [3]

Q: Do I need to have a physical office in Bermuda?

A: While a full physical office is not required for all license classes, every Bermuda insurer must have a registered office and a Principal Representative in the jurisdiction. This is usually provided by a local corporate service provider or insurance manager. [2]

Q: What is the tax rate for insurance companies in Bermuda?

A: Bermuda currently has no corporate income tax, profits tax, or withholding taxes. This tax-neutral environment is a primary attraction for international businesses. However, companies must still pay annual government fees. [3]

Q: What are the latest regulatory updates for insurance companies in Bermuda?

A: The BMA updated its licensing process for insurers in January 2026 to provide greater clarity and consistency. Additionally, the Insurance Amendment No 2 Act 2025, which became operative on 7 January 2026, has brought changes to Bermuda's group supervision regime. [1, 2]

Q: How many new insurance companies were registered in Bermuda recently?

A: In January 2026, the BMA approved eight insurance applications and nine new insurers were registered. [4]

Sources

[1] Kennedys, "The Bermuda Monetary Authority updates its licensing process for insurers," https://www.kennedyslaw.com/en/thought-leadership/article/2026/the-bermuda-monetary-authority-updates-its-licensing-process-for-insurers/ [2] Chambers and Partners, "Insurance & Reinsurance 2026 - Bermuda," https://practiceguides.chambers.com/practice-guides/insurance-reinsurance-2026/bermuda [3] Conyers, "SETTING UP A BERMUDA (CLASS 1) CAPTIVE INSURER," https://www.conyers.com/wp-content/uploads/2018/07/2018_05_BDA_SETTING_UP_CLASS1_CAPTIVE_INSURER_FINAL_WEB.pdf [4] Bermuda Monetary Authority, "Insurance Registration Statistics January 2026," https://cdn.bma.bm/documents/2026-02-12-09-33-12-January-2026-Monthly-Registration-Statistics.pdf [5] Bermuda Monetary Authority, "Homepage," https://www.bma.bm/

Economic Substance Requirements

In addition to the regulatory requirements imposed by the BMA, insurance companies in Bermuda must also comply with economic substance legislation. The Economic Substance Act 2018 requires companies engaged in relevant activities, including insurance, to demonstrate that they have adequate substance in Bermuda. This means that the company's core income-generating activities must be conducted in Bermuda, and the company must have an adequate level of employees, expenditure, and physical presence in the jurisdiction. Failure to comply with economic substance requirements can result in significant financial penalties and, ultimately, being struck off the register of companies.

The Bermuda Solvency Capital Requirement (BSCR)

The BSCR is a risk-based capital model that is used to determine the amount of capital that an insurer is required to hold. The BSCR is a sophisticated model that takes into account a wide range of risks, including underwriting risk, market risk, credit risk, and operational risk. The BSCR is a key component of the BMA's risk-based supervisory framework and is designed to ensure that insurers have sufficient capital to meet their obligations to policyholders. The BSCR is a dynamic model that is regularly updated to reflect changes in the risk profile of the insurance industry.

The Three-Tiered Capital System

The BMA has also implemented a three-tiered capital system to assess the quality of an insurer's capital resources. This system classifies an insurer's capital into three tiers, based on its ability to absorb losses. Tier 1 capital is the highest quality capital and includes common shares and retained earnings. Tier 2 capital is of a lower quality than Tier 1 capital and includes instruments such as subordinated debt. Tier 3 capital is the lowest quality capital and includes instruments such as letters of credit. The BMA requires insurers to maintain a minimum level of Tier 1 capital and to ensure that their total capital is sufficient to meet the BSCR.