The European Commission has recognised the Bermuda Monetary Authority’s prudential framework for reinsurance as meeting the impending Solvency II requirements.

The legal recognition covers Bermudian reinsurers and insurance groups.

The authority’s CEO Jeremy Cox says Bermudian companies will be able to compete in Europe and not be disadvantaged against local insurers.

“But Bermuda’s captives and special-purpose insurers remains out of scope of the Solvency II equivalence assessment,” he said.

“Bermuda has worked long and hard to become a global risk marketplace.

“There is now no doubt as to the calibre of commercial reinsurers operating from Bermuda or the quality of their regulatory environment.”

Meanwhile, Munich Re’s internal model for meeting Europe’s Solvency II regulations has been approved by the German regulator without any changes.

Its application, submitted in May, features about 15,000 pages setting out the group’s approach to the capital regulations.

Munich Re’s 2014 financial year results show €243.2 billion ($355.11 billion) of investments, with €193.5 billion ($282.54 billion) of risks.

This led to €38.2 billion ($55.78 billion) of excess assets that have now been classed as eligible own funds for the reinsurer’s capital resources.

Under the requirements goodwill has no recognition, property loans will be treated at fair value and surplus funds treated as own funds.

“This underlines the comprehensive and risk-commensurate calibration of the internal model already used by Munich Re,” CFO Jorg Schneider said. “Even after Solvency II comes into force, Munich Re will retain a great level of flexibility for capital management.”