Insight

Understanding RELM’s Class IIGB License 

Understanding Relm’s Class IIGB License By Joseph Ziolkowski & Sophia Zaller

Domiciled in Bermuda, Relm Insurance Ltd. is regulated by the Bermuda Monetary Authority (BMA), which has demonstrated a longstanding commitment to embracing technology and alternative solutions that address the evolving needs of the insurance industry. Most recently, the BMA’s Insurance Amendment Act 2018 introduced a new ”Innovative Insurer General Business” (Class IIGB) regulatory framework for digital asset and cryptocurrency insurers. Following a rigorous review of our business model, leadership and long-term strategic vision, Relm received the Class IIGB license in December 2020. 

As the first and only insurer regulated under the Class IIGB framework, Relm is uniquely positioned to alleviate the massive scarcity of insurance capacity for digital asset businesses. Beyond offering our clients an additional layer of assurance regarding our business operations and solvency, the Class IIGB license allows Relm to: 

  • Transact insurance contracts on the blockchain: 

Relm is pursuing several research and development initiatives that will ultimately enable us to issue insurance policies on the blockchain. By automating the flow of funds between parties and reducing intermediary friction, conducting insurance on the blockchain will enhance the transparency of our coverage verification and claims payment processes while minimizing premium costs for our policyholders.  

  • Denominate policies, receive premiums and pay claims in cryptocurrency: 

Relm has already accepted premium payments denominated in a range of tokens and stablecoins (as well as various fiat currencies). The seamless settlement and absolute visibility of blockchain transactions maximizes the efficiency of Relm’s underwriting and claims payment processes, freeing up time for us to thoroughly evaluate each risk we consider.

  • Hold cryptocurrency on our balance sheet:

Maintaining digital assets on our balance sheet enables us to expand Relm’s capital position and offer asset matching for crypto-denominated insurance contracts. Additionally, holding cryptocurrency on our balance sheet demonstrates the firm’s long-term commitment to the industry and to our clients. 

Equipped with these new capabilities and bolstered by our team’s deep blockchain expertise and tailored underwriting strategy, Relm is already bringing meaningful capacity to an emerging market seeking traditional insurance coverage, including Directors & Officers Liability Insurance, Professional Indemnity Insurance, and Crime Coverage. Additionally, Relm offers bespoke insurance solutions that provide protection against complex new threats, including cybersecurity risks, smart contract failure, and staking / slashing events. 

Spurred by soaring asset prices and rapid mainstream adoption, sophisticated investors have already begun to pour billions of dollars into the digital asset space. However, available insurance capacity hasn’t scaled alongside institutional demand, hindering the sector’s growth. By addressing digital asset operators and investors’ tremendous appetite for risk protection, Relm Insurance Ltd. is poised to accelerate the emergence of this industry while disrupting the traditional insurance marketplace. 


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