What is Bermuda?
Bermuda
Bermuda is a jurisdiction whose regulatory treatment of captive reinsurance and rating agencies has drawn scrutiny in discussions of insurance-linked risk transfer. The material tracks how Bermuda-based captive reinsurers let companies move money and risk between legal entities, and how its regulators have adjusted which credit ratings they accept.
How it developed
- Sep 2026 - Andrew Granato described captive reinsurers as subsidiaries that move money and risk “out of one of your pockets and putting it into another of your pockets.”
- Sep 2026 - Pranjal Drall said Bermuda regulators have stated they will no longer accept Egan Jones ratings.
- Sep 2026 - Granato cited news reports suggesting leverage numbers on the order of magnitude of 50 to one, calling the figure “just kind of incredible.”
In the evidence
Every line below is attributed to a named speaker.
Captive Bermuda reinsurer subsidiaries let PE-backed insurers move risk and assets into a different legal pocket, escaping disclosure requirements that apply to the primary entity.
“If you have a cap what's called a captive reinsurer or a subsidiary reinsurer, this is just part of your own company, but it's a different legal entity. So, you're moving the money and the risk out of one of your pockets and putting it into another of your pockets. But if you keep it in the main pocket, you're subject to disclosure requirements. And if you put it into this other pocket, you're not subject to these disclosure requirements.”Andrew Granato · 6 Sep 2026
Egan Jones, a NRSRO whose ratings Bermuda regulators have now formally rejected for insurance company assets, worth watching as a proxy for regulatory tightening on ratings arbitrage.
“Bermuda regulators have said that they will no longer accept Egan Jones ratings.”Pranjal Drall · 6 Sep 2026
Andrew Granato on 50-to-1 leverage at PE-backed Bermuda reinsurers.
“In some news reports I've read have suggested thing numbers on the order of magnitude of 50 to one, you know, which is just kind of incredible.”Andrew Granato · 6 Sep 2026
Some PE-backed life insurers operating through Bermuda captive reinsurers are reportedly leveraged as high as 50-to-1.
“In some news reports I've read have suggested thing numbers on the order of magnitude of 50 to one, you know, which is just kind of incredible.”Andrew Granato · 6 Sep 2026