Information Request for Group-wide Supervision (2009-12-18)

Summary

This is a 2009 information request circular from the Bermuda Monetary Authority addressed to Class 4 and Class 3B insurers, issued as part of the Authority's work developing its group wide supervision framework following its March 2009 Discussion Paper on Implementing Group Wide Supervision. It asks recipients to submit specific information about their group structure, supervisory status and intra group transactions to help the Authority formulate group supervision policy.

• Group supervision status: Whether the insurer is currently subject to group wide supervision, and whether it believes the Authority would be its Group wide Supervisor under the Discussion Paper approach.
• Legal entity mapping: A list of all legal entities in the group, categorised as regulated (with financial sector) or unregulated, and grouped by location (Bermuda, EU, US, other G10, other non-G10 countries).
• Other supervisors: Whether another supervisor has indicated willingness or ability to act as Group wide Supervisor.
• Group solvency calculations: Whether the group prepares a group solvency calculation for other supervisors (e.g. the EU) and, if so, details of the latest calculation.
• Intra-group transactions: A list of material intra group transactions for the period ending December 31, 2009, in US dollars, covering loans, investments in affiliates, guarantees, reinsurance/retrocession, risk transfer arrangements, asset management and servicing arrangements, with exposure values, counterparties, transaction summaries and duration.
• Materiality threshold: An intra group transaction is material if it can reduce available statutory capital and surplus by 5% or more, or if a series of linked transactions can cumulatively reduce it by 10% or more.

The Authority requested that all of the above information be submitted by April 30, 2010, with queries directed to named contacts in its Policy, Research and Risk Assessment Department. As a superseded circular, it no longer reflects current BMA group supervision reporting requirements but is retained for historical reference.

Key obligations

• Class 4 and Class 3B insurers must submit the requested group supervision information to the BMA on or before April 30, 2010.
• Recipients must disclose whether they are currently subject to group wide supervision and their view on whether the BMA would be their Group wide Supervisor.
• Recipients must provide a categorised list of all legal entities in their group (regulated and unregulated) grouped by jurisdiction.
• Recipients must disclose whether another supervisor has indicated willingness to act as Group wide Supervisor.
• Recipients must disclose whether their group prepares a group solvency calculation for other supervisors and provide details if so.
• Recipients must provide a list of material intra group transactions for the period ending December 31, 2009, in US dollars, applying the specified materiality thresholds and providing exposure, counterparty, transaction summary and duration details.

Applies to

Class 4 insurers, Class 3B insurers

Deadlines

• April 30, 2010: Deadline for submitting the requested group-wide supervision information to the BMA.
• period ending December 31, 2009: Reporting period for which the list of material intra-group transactions must be provided.