Consultation Paper on the Enhanced Reporting Requirements for Limited Purpose Insurers (January 2012)

Summary

This is a Bermuda Monetary Authority consultation paper (January 2012, draft status) proposing enhanced statutory reporting requirements for limited purpose insurers. It sets out proposed changes to the existing Statutory Financial Return and invites industry comment before any rules are finalised.

• Consolidated annual Return: Proposes combining the existing Statutory Financial Return, annual Insurance Code of Conduct attestation, risk reporting and information previously collected via the voluntary annual market survey on captives (AMSC) into a single annual filing.
• New disclosure items: Would add company information, a consolidated declaration signed by two Directors and the Principal Representative, statement of control and changes of control, an own risk assessment, underwriting analysis, collateral analysis, detailed premium information, income statement and balance sheet schedules, and segregated accounts company details.
• Electronic filing: The Authority intends to implement an online electronic filing system that would automate ratio calculations, remove the need for a separate Declaration of Statutory Ratios, and flag higher-risk insurers for closer review.
• Audit treatment: The existing audit requirement under the Insurance Act 1978 would remain unchanged; auditors would not be required to opine on the new schedules, and the audit opinion would be attached as a PDF to the electronic Return.
• Section 56 exemption holders: Insurers with a Section 56 Direction exempting them from sections 15 to 18 of the Insurance Act would still need to submit unaudited versions of several schedules (company information, declaration, control statement, own risk assessment, and income/balance sheet schedules) annually.
• Trial run and commencement: A trial run of the electronic Return is planned with a sample of limited purpose insurers before rollout, and an enforcement date for the legislative rules will be confirmed only after the consultation period closes.

As a consultation paper, none of these reporting changes are yet in force. The Authority asked stakeholders to submit comments on the proposals by close of business on 15 March 2012, after which it will determine final rules and an effective date.

Key obligations

• Stakeholders wishing to comment on the proposals must submit comments to policy@bma.bm no later than close of business on 15 March 2012.

Applies to

Class 1 insurers, Class 2 insurers, Class 3 insurers, Class A insurers, Class B insurers, Special Purpose Insurers, Segregated Accounts Companies, Rent-A-Captives

Deadlines

• 15th March, 2012: Deadline for industry and stakeholders to submit comments on the consultation paper's proposals to policy@bma.bm.