BMA Parametric Framework

Ensuro operates under a BMA Innovative Insurance General Business licence (April 2024). Bermuda's regulatory framework for parametric products is the most developed globally — and is evolving further.

Why BMA Matters

The Bermuda Monetary Authority has positioned Bermuda as the leading jurisdiction for insurance-linked securities (ILS) and parametric products. Key advantages:

• Established ILS regime — the most developed globally, with decades of cat bond and parametric product experience
• Solvency II equivalence — recognised by EIOPA, providing regulatory credibility in EU-adjacent markets
• Innovation-friendly — the "Innovative Insurance" licence class was created specifically for products like Ensuro's
• BMA recognition facilitates bilateral arrangements — potential future recognition by other regulators

Proposed PSPI Class

BMA is developing a new Parametric and Specified Perils Insurance (PSPI) class that would:

• Formalise parametric product types at the regulatory level
• Allow broader distribution beyond traditional rated reinsurers
• Create a specific regulatory framework for index-based insurance products
• Provide clarity on capital requirements, governance, and consumer protection

This directly benefits Ensuro's positioning and, by extension, Cliff Horizon's distribution capability.

Implications for Cliff Horizon

Regulatory Credibility

When Cliff Horizon presents Tier 3 derivatives to institutional clients, the counterparty is Ensuro — a BMA-licensed entity. This provides:

• Regulatory oversight (BMA supervision)
• Capital adequacy requirements (solvency standards)
• Audit requirements (Quantstamp, SlowMist)
• A known regulatory framework that institutional risk committees can evaluate

Cross-Border Recognition

BMA's Solvency II equivalence means:

• EU-adjacent markets recognise BMA regulatory standards
• This may facilitate acceptance of Ensuro-backed products in jurisdictions that would otherwise scrutinise a blockchain-based counterparty
• Future bilateral arrangements between BMA and other regulators (MAS, DFSA, FSRA) could expand market access

India Potential

The ISDA EMDE Survey notes that several EMDEs restrict derivative counterparties to locally regulated entities. If BMA achieves bilateral recognition with RBI or SEBI, Ensuro-backed products could potentially access the Indian market — currently classified as Tier 1 (effectively prohibited) for direct OTC.

This is speculative and long-term, but BMA's proactive approach to parametric regulation makes it more plausible than it would be with a less established regulatory framework.

Ensuro's Compliance Structure